Kumar Gera, president of Confederation of Real Estate Developers’ Associations of India (CREDAI), voices his skepticism: “There is no harm in having a regulator, provided the objective is to ensure that all parties responsible for the successful completion of a real estate project fulfil their respective obligations . The parties I refer to are the developer , the local authority, the service providers, the purchasers, and the financing agency. It is only when all these parties do what they are obliged to do that a project will be successful. If any one of them fails, the desired result is not achieved. Hence, all responsible parties need regulation under the same act or bill. If this is not done and only a developer is targeted, the desired results cannot be achieved and it will be one more bottleneck in the system.”
Ashiana’s Vishal Gupta reiterates this point and says that this will only create another level of authority leading to more delays, red tapism, and higher cost, which will be ultimately counterproductive for end users. He says that by doing this, we are challenging the competence of existing authorities who regulate real estate at local level , as now, every developer needs to get his project plans sanctioned , land use changed, get licence for construction, follow building bylaws, and get a commencement and a completion certificate. He suggests that instead of a regulator , we need a fasttrack consumer redressal court where justice is dispensed, as real estate investment is the single largest investment a person makes in his lifetime.
Giving another perspective , RE/MAX (a global network of brokers ) India’s Samir Chopra feels that a regulator would help eliminate anomalies in the existing legal system due to multiplicity of authorities and procedural complexities. He says this federal regulatory body cannot hold responsibilities like providing guidance on policy framework, resolution of stakeholders’ concerns, and consumer rights’ protection. “Broadly, an independent regulator with clearly set guidelines and directives to follow will ensure fair competition and protect the interests of builders, brokers, investors, and above all — consumers. The model regulation could have a quick redressal mechanism for real estate industry, which is often faced with a litany of disputes.”
Some industry insiders also feel that having a regulator may not solve the problem and there are enough regulations at present. According to Sharad Jhingan, COO of Pvt Equity Fund at Lanco Infratech Ltd, “The real issue is enforcement and enactment of regulations.” He adds that there are several regulations for a lot many things now, despite which real estate developers have major time and cost overruns in their projects. Besides, they continue to violate norms by indulging in prelaunches or assuring a fixed return on investment, thereby acting more as NBFCs (non-banking financial companies).
Cut to the consumers, and they badly want someone to lend a voice to their woes when they are at the receiving end. According to an MNC executive, Manish Khurana, “We people put all our savings into a property, which can turn out to be a big risk in this highly speculative market. It’s high time real estate sector got organized and our rights protected.”
Consumers feel a regulator will not only lend a voice to consumers, but also help in creation of a more transparent market and hold developers accountable. According to Akash Kapur, an investor: “When telecom, petroleum and civil aviation industry are doing well with a regulator – the end user is a beneficiary. Also, it provides a level playing field for market players. It’s high time the real estate industry is regulated.”
