Thousands of people have spent their hard-earned money, sometimes their entire savings, only to fall prey to unscrupulous builders and developers who abound in the city. There are a number of problems associated with buildings and layouts developed by these shady businessmen, such as not delivering projects on time, not providing buyers proper documents, even developing illegal layouts on revenue land and lake beds and selling them to gullible customers. By the time buyers realize that they have been cheated, it’s too late. Now at last, a proposed bill to regulate the real estate industry might finally put an end to all this and tilt the balance in favour of the customer.
"I have put my entire life’s savings on my house and this is all I have. But a government’s notice one year ago has shaken my world. I have no assurance that my house will not be demolished and my family is sitting on a ticking bomb. Can the government ever understand our trauma?” says D.S. Rajashekar, a resident of Kalyan Nagar.
For thousands of families like Rajashekar, who were the once proud owners of a coveted BDA plot, the last one year has been a roller coaster ride. The BDA has admitted its ‘mistake’, leaving lakhs of households in fear.
Now, the proposal of The Real Estate (Regulation and Development) Bill is light in the end of dark tunnel. If approved to make the Bill an Act, it will regulate transactions between buyers and promoters of residential real estate projects. The Bill proposes to establish state-level regulatory authorities called Real Estate Regulatory Authorities (RERAs). Though the Bill is in the right direction, the onus is on the lawmakers to define the promoters, which should also include government agencies, opine experts.
“Many ‘pro-citizen’ initiatives like Akrama-Sakrama have gone without a mention of pinning down the officials, who approved layouts on lake beds, violating all rules. Such loopholes must be addressed in The Real Estate (Regulation and Development) Bill and should make someone accountable,” says Mahalakhsmi Parthasarthy, secretary, Citizens’ Action Forum.
Read | ‘Regulation should address demands of customers and sellers’
She further added that the law-makers should define who these promoters will be and should specially emphasize that even government agencies like BDA should be called ‘promoters’. “For long, the government agencies have walked scot-free. If the Bill is being drafted in the best interest of citizens, then start the process with issuing notices to BDA officials. The government agencies too should be treated like promoters,” she added.
Federation of Bengaluru North East residents’ welfare association president D.S. Rajashekar, slams that The Real Estate (Regulation and Development) Bill is another ploy of the government to pass the buck.
“Yet again the government has tried to save itself by proposing to pin down the promoters, who are mainly private builders, but doesn’t speak a word about government agencies. So if private builders are at fault, the Bill provides relief. But what happens to the owners of BDA plots?” Mr Rajashekar questions.
The government agencies will walk scot-free while common man bears the brunt. No laws are introduced with retrospective effect to pin down the culprits. It appears that the laws are made only to safeguard vested interests, he added.
Experts have suggested the Bill should not become an eyewash and help lakhs of innocent citizens, while fixing accountability on builders and promoters.
Legislation welcomed by real estate sector
In an attempt to check the spread of the real estate mafia, the government has come out with the Real Estate (Regulation and Development) Bill, which aims at fixing responsibility on builders rather than buyers. This has been welcomed by the realty sector.
Revenue layouts have been mushrooming around the city, especially on the outskirts. This has given rise to haphazard and unregulated growth. Those who’ve developed these revenue layouts aren’t bothered about laws and form layouts according to their whims and fancies. The bill will also prevent layouts from coming up on revenue lands and lake beds. This will not only benefit the planned growth of the city but also save gullible people from falling prey to unscrupulous builders.
The real estate bill is a step in the right direction. The realty business was not a regulated one till now and needed this kind of regulation to bring about better practices in the industry, said Farooq Mahmood, Chairman and Managing Director of Silverline realty.
Consumers too benefit to a great extent from the bill. First of all, the builder cannot shrug off his responsibilities in issuing bonafide title to buyers. Ultimately, he will be held responsible. Consumers too can shed the fear of getting a flat or plot that has come up on revenue land or a lake bed, said Mr. Mahmood.
Yet another important aspect that needs to be noticed here is the increase in overseas investors. Hitherto, investors were not happy as the laws were not stringent and regulated, he said and added that the bill needed to address issues like exorbitant penalties. Instead, the penalty clause should be logical. Levying 10 per cent of the amount of the total sale of the apartment is too high. It should be reasonable.
The Confederation of Real Estate Developers’ Association of India (CREDAI) has welcomed the move and says that the bill will enable both seller and buyers to have clarity on the title and to have easy transferability.
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