If passed in the winter session of Parliament, this bill will bring order in the realty sector
Has your builder replaced the marble flooring promised in the snazzy brochure in your 2250 sq ft apartment with cheaper crème vitrified tiles?
Has the apartment also shrunk in size to 2000 sq ft?
Do you want to take the builder to task but don't know what to do?
There's hope for disgruntled home buyers if the Real Estate (Regulation and Development) Bill, 2011, to be tabled in Parliament in the upcoming session, comes through.
The new draft bill, released recently by the union minister for housing and urban poverty alleviation Kumari Selja for public consultation, promises to set up a real estate regulatory authority to improve transparency in the sector among other things. It also seeks to set up a real estate appellate tribunal to resolve disputes between developers and customers.
The appellate tribunal provided for within the new version of the bill, is now at a central government level as opposed to the state level earlier. However, given that the bill leaves it to the state governments to establish a regulatory authority means that its benefits will be in evidence once states have established their own regulatory authorities. That of course will take time. Also, consumers may have to file a complaint first with the state regulatory authorities, before going to the appellate tribunal at the central level in case they are not satisfied by the verdict of the state regulatory body.
“This will make the redressal mechanism time consuming. There needs to be more clarity in the bill regarding the role of the state dispute resolution mechanism and that of the appellate tribunal at the central government level,“ says Sachin Sandhir, managing director, South Asia, RICS.
So, how will the appellate tribunal be different from a consumer court? The fundamental objectives of both the tribunal and court are similar: to redress a dispute.
However, tribunals tend to be more informal than a consumer court and faster because of a less formal structure. Also, appellate tribunals are set up for resolving disputes in specialised areas as the courts generally have the power to hear a broader range of issues. So, the objectives are the same but the mechanism for tribunals are more specialised and less formal.
Anuj Puri, chairman and country head, Jones Lang LaSalle India, agrees. For buyers as well as industry stakeholders, the biggest advantage the draft offers is that there will be an appellate tribunal available to attend to their grievances, he says.
“A regulator is, by function, impartial and will take into consideration the entire industry and its various stakeholders. The tribunal will benefit developers as much as consumers, since they will have official advocacy on their issues. To my thinking, this is a far more beneficial to them than tabling their demands and grievances before every union budget and having them ignored“, he says.
To illustrate the Directorate General of Civil Aviation (DGCA) mediates between all stakeholder configurations, including airlines and airport operators, airlines and passengers, fuel providers and airline operators. In other words, the DGCA does not exist solely to benefit passengers or airline operators. It addresses unfairness at all levels and has the power to intervene and rectify on any stakeholder's behalf. If the Model Real Estate Regulation Act introduces a universal regulatory and an appellate tribunal, it should be sufficiently empowered and mandated to solve discrepancies and work towards the common good of the entire industry.
The draft also mentions a correlation between the Competition Commission of India, whereby the bill establishes that any disputes that fall within the purview of the commission will be passed on to them for review and resolution. This is again a step in the right direction.
