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Time for quality third party audit in real estate?

Posted on by Track2Realty
Track2Realty Exclusive

Bottom Line: The rising number of consumer activism and legal challenges to the sector indicates it is the time that the developers shift equal focus on the quality of execution, finds Ravi Sinha. The question is: will a quality audit by a third party help? 

Vendor Mangament, Supply chain, Real estate suppliers, Real estate developers not paying to suppliers, Nonpayment in real estate, No credit in real estate, India real estate news, Real estate news India, Indian realty news, Indian property market, Track2Media Research, Track2RealtyA section of analysts maintain that it has been proved across the industries that quality audit by third party improves the product or services being offered if it has been implemented in right manner and objectives to improve the quality. As product or services gets improved in standard of quality at consistent basis then perceptions of customer towards the management also improves.

Quality audit does change the market dynamics in long run if major players use the same. For example, if major players in the industry start using the third party quality audit then industry standards also improves.

Currently, only few developers are using the third party audits for services being provided. The quality of the construction is only checked by respective consultants from time to time which promises the quality of the project.

A MCHI-CREDAIspokesperson maintains that third-party quality audits have been a continued practice within the manufacturing community since release of the ISO 9000 standard in 1987. They have been an accepted practice within the North American manufacturing industry for several decades. 

“In the late 1980s and early 1990s, the audit process gained enormous momentum via the introduction of international standards such as ISO 9001, ISO 14000, and industry-specific standards such as QS 9000. Each of these compliance standards requires a third-party audit to evaluate the organization’s management system against the requirements outlined in the standard,” says the above quoted person.

In a nutshell, there are two self-inflicted injuries that make the developers look vulnerable in the market today. They have no one but themselves to blame for ending up being seen as non-trustworthy developers. 

One, of course, is that their focus is more on new launches than the execution of the existing projects. The focus on the land bank has trapped them with land liability today.

Secondly, in the fiercely competitive market where the majority of the developers are offering projects with very little difference in quality and amenities in a particular segment, the game of over-promise begins with delivery timelines. As a result, most of the new launches mention 24 to 36 months as the completion time.

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