To clean the Augean stables of the Real Estate sector, a powerful regulator is required, to take the necessary action against erring developers and other agencies that are responsible for the problems being faced by home buyers. It is time also that Real Estate is given industry status, so that builders can get easier access to capital, and the funding of residential projects becomes transparent. These were the main demands of various stakeholders, who had come together under the aegis of the Federation of Apartment Owners’ Association (FAOA), which organised a Real Estate Consumers’ Seminar on the proposed Real Estate Regulatory Bill 2013. There were more than 200 representatives from different RWAs who attended the Seminar, and expressed their views on the real estate scenario, and what needs to be done to correct the anomalies. Union Housing Minister Ajay Maken, who was scheduled to be the Chief Guest, was conspicuous by his absence.
Explaining the agenda of FAOA at the start, Gautam Gulati, Senior Vice President of FAOA, said that they wished to create awareness, set up a knowledge bank, and guide RWAs in matters pertaining to maintenance, customer rights, and rules and regulations related to Real Estate. “We want to push for the legitimate rights of the apartment buyers – but we are not a trade union. We want to engage with policy makers and developers, to ensure that the interests of the buyers are factored in when policies are made,” he asserted.
A number of residents demanded that the government must play an active role in regulating this crucial sector, in which a person invests almost half of his/her life’s savings. They demanded that the proposed Real Estate Bill should have enough teeth and punitive powers, to ensure that action is taken against erring builders. Gulati also told the audience that the proposed Bill is more geared towards plotted colonies, and takes lesser cognizance of apartment complexes. “This is an anomaly, and we have also drawn the attention of the government towards the concept of Super Area, which has been used to dupe apartment buyers,” he said. A presentation has been made to the government.
Speaking on the occasion, G.B Singh (of Red Fort Capital), an industry veteran, said that the Real Estate industry needs to transform itself to meet the current challenges. “The management style, quality of contractors and regulatory mechanism need to change, if we want to have a quality Real Estate sector in the country,” he said in his presentation.
Participating in the Panel Discussion, Anurag Mathur of JLL said that the Real Estate sector has come a long way in the last two decades, and there is more institutionalisation now, with more people opting for a ‘legitimate business’ and ‘professionalism’. Mathur said that the next big change in this Sector must come from the government, to give the right direction, and also force players to act within certain parameters. Citing an example, Mathur said that India still does not have valuation standards for Real Estate, and valuers have to work on certain premises only.
Another contention put forth by panelists was that the entry and exit barriers to becoming a developer were very low. Any person with a large parcel of land can now become a developer, irrespective of whether he has the knowledge or experience in realty.
Sanjay Sachdev of AIPL Builders, representing the Real Estate players, said that all builders cannot be branded as exploitative. He admitted that a majority of participants might have had a bitter experience with builders, but in his own company they were already following the rules enunciated by the proposed Real Estate Bill.
Commenting on different methods used by builders to dupe the buyers, Sanjay Bhasin, President of Belaire Association, said that consumers are very unhappy and upset. He also admitted that apartment buyers who want to make a quick buck are also partly responsible for the mess in the housing sector. One of the aggrieved residents also opined that the government must force the developers to share information, and ensure that arbitrary decisions taken by them in relation to enhanced EDC and power charges are monitored properly.
Yash Gupta, MD of Hines India, elicited strong response from the participants when he said that the Real Estate buyers did not understand the Real Estate business, and the costs involved in the development of properties. “As a result quality developers suffer,” he said. His contention was opposed by many members of RWAs, who alleged that builders had no interest in following the spirit of the law, and their only concern was raking in profits. They also said that courts and consumer forums were being used by developers to delay the resolution of disputes, and it was just a ploy to tire out the complainants.
Brigadier Madanjeet Singh explained how builders like DLF had used the legal process to ensure that a large number of buyers were denied an apartment, after they refused to pay additional ‘illegal’ charges. “I bought an apartment from DLF in 1994, but could not take possession due to a legal dispute. Since 2007, not a single hearing of the case has been held in the Supreme Court, and justice stands denied to me due to the clout of the builder,”
An RWA representative from Faridabad recalled how hundreds of plot owners were duped by a powerful builder, right under the nose of the government – and nothing much has been done to resolve the problems of buyers. Gulati of FAOA reiterated that they would like to bring diverse RWAs together and unite the buyers, so that they are no longer exploited – and get their rightful due.