Credai concerned as govt readies to table bill

Come monsoon session of Parliament early next month, August 5 to be precise, and the Union Government will introduce a buyer-friendly real estate legislation with the avowed objective of protecting the consumers and bringing transparency in the sector. But the realtors and builders are far from enthused; they harbour some reservations and feel that the measure is a populist one, and does not cover all stakeholders in the industry. 

 

Reacting to the government’s announcement of its intentions to bring the bill, the Confederation of Real Estate Developers Association of India (Credai) has said that the proposed measure should govern all stakeholders, not developers alone. What’s more, it feels that the bill will further increase the cost of development and delay projects. 

 

“We want a regulator. But like the regulators in other sectors such as telecom and insurance, it should govern all stakeholders,” Credai Chairman Lalit Kumar Jain said while speaking at the Assocham conference. The planning authorities, banks and other government authorities do not come under the purview of this legislation, he said. “It is a populist measure that will please the consumers. Bring a regulator with proper design and understanding of the business,” Jain demanded. The developers are now required to take a number of approvals from various government authorities that take anything between 6 and 18 months. And after the bill is okayed, they will also have to register their projects with the regulator. Jain feared that “now those developers who are not politically aligned, will have to be politically aligned.” 

 

Assocham has released a report ‘Regulatory Issues and Clearance for Real Estate Sector’ jointly with global property consultant Cushman & Wakefield (C&W). The report welcomed the government’s move to regulate the sector. “Besides safeguarding the buyers’ interest and bringing credibility to the developer community, the Real Estate Regulatory Bill is also likely to attract investment from domestic and global funds that have harboured scepticism in investing in Indian real estate largely on account of the lack of regulation,” the Assocham-C&W report said. 

 

However, it said the need for single-window clearances in the shortest possible time had become quite demanding. The Bill provides for setting up of a regulator for the real estate sector and has provisions like a jail term of up to three years for developers who commit offences like putting up misleading advertisements about projects repeatedly. It also intends to make it mandatory for developers to launch projects only after acquiring all statutory clearances from relevant authorities. 

 

“We shall be introducing the Real Estate (Regulation and Development) Bill, 2013, which is relevant to the real estate sector in the monsoon session,” says Housing and Urban Poverty Alleviation Minister Girija Vyas. After its introduction, the measure, already approved by the Cabinet, is likely to be referred to the Standing Committee of Parliament for detailed examination. 

 

Describing the Bill as a pioneering piece of legislation which will standardise and professionalise the segment, Vyas said, It will ensure consumer protection and promotion of the real estate sector through effective regulation and introduction of speedy mechanism for adjudication of disputes, she added. Needless to emphasise, real estate is one of the largest business and employment generators in Indian economy. 

 

Despite its mammoth size, it does not have a regulator which can balance the interests of various stakeholders involved though there are a number of legislations at various levels that affect the sector directly or indirectly.