Tuesday, 21 June 2016

The other side of the Real Estate Bill

The Real Estate Bill was hailed as a welcome step to put the unorganized and anarchic state of the real estate sector into a semblance of normalcy, an attempt to create certain guidelines that real estate developers would follow to ensure protection of the buyers. While the actual implementation will still take times, with a lot being dependant on various state governments, the bill will address key issues like creating a regulatory body to guard consumers, mandatory registration of projects, registration of agents and redressal of consumer complaints in a quick and efficient manner.

While all these steps are brilliant and no doubt will ensure that the chaos in which the real estate sector functions will be reduced considerably, there are a whole host of issues that have to be monitored so as to avoid any problems in future. The state and local authorities have been given huge roles to play with both approval and monitoring of projects coming under their aegis, the point to be kept in mind here is that these authorities don’t themselves become hurdles and a hub for corrupt practices.

Another important issue is that with the parking of funds in an escrow account, the burden on developers is going to increase which consequently will lead to an increasing of property prices, additionally the fact that this is going to be another bolt to the liquidity crises most developers already face. Another area of concern is the ambiguity in terms like “Carpet Area” which might later lead to issue with standardization in any future legal tangles. With so many points of approval and registrations involved it seems like the builders have a tiresome task ahead of getting all requisite clearances.

While the governments intentions in terms of streamlining the sector and bringing more transparency seem true, the Bill has a lot of areas where the without proper setup and implementation there are going to be a number of pitfalls. However, it is too early to be cynical; the Act is the beginning of pushing the real estate sector in the right direction and with the support from government it is highly possible that the industry itself will ensure its success. 

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