Thursday, November 12, 2009

Govt sets real estate regulation law moving Assetventures

After dragging its feet on the issue for two years, the state now looks the most serious it has ever been about enacting legislation to regulate the housing sector.

The proposed law, called Model Real Estate (Regulation of Development) Act, has made little progress so far due to opposition by the builders’ lobby, but now, under pressure from the Centre, the state has set it in motion.

Sitaram Kunte, principal secretary (housing), said: “This will be a mechanism to tackle home buyers' grievances and prevent cheating by developers.” He said the draft forwarded by the Centre is being studied by the state, which will make revisions and table it before the state Cabinet, which will take the final decision.

For years, there has been a demand for watchdog legislation along the lines of the Securities and Exchange Board of India, which regulates the country’s stock markets.

Consumers have accused developers of cheating them by delaying handing over of flats, arbitrarily increasing rates, and illegally chargingfor parking space etc. “We need some checks and balances. Today, anyone can become a builder; there is no accountability at all,” said lawyer Vinod Sampat.

Builders have opposed regulation saying it will impede growth of the sector. “Our industry works on demand and supply — there’s no way to control prices. We buy land in the free market at current rates and sell flats according to existing conditions,” said Sunil Mantri, president elect, Maharashtra Chambers of Housing Industry, an apex body of builders.

Real estate experts have cautioned that care should be taken while framing the law. “Existing laws are enough to tackle consumer grievances; unfortunately they are not being implemented. Care should be taken to ensure the new law does not become a toolfor harassment,” said Ashutosh Limaye, associate director, strategic consulting, Jones Lang LaSalle Meghraj, a real estate consultancy.

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