By: Ravi Sinha
In the year 2007 Preeti Banerjee bought a house in Royal Legacy, Vasundhara, Ghaziabad with the obvious high expectations of moving into a hassle free living. However, the dreams were soon shattered and she was exposed to the agony of an average middle class home buyer, often left alone at the mercy of the builders. What makes the story of this television producer newsworthy is the stark reality of how in the absence of any regulation, the real estate companies that flourished in the NCR region in the last one decade have made a fortune with the hard earned money of many like Preeti Banerjee.
The dream of the average middle class family to have ones own house has of late become nightmare. Delayed possession, default on design and construction parameters, mismatch of space in the guise of floor area & carpet area, the list of woes for home buyers seems to be endless. In the absence of any prescribed guidelines, the developers are often found collecting funds from the booking in one project and diverting it to either purchase more land bank or kick start another project. The biggest investment of ones lifetime is more often than not either compromised with or ends up in the legal battle. The number of cases in the consumer courts by aggrieved home buyers has skyrocketed of late.
In some of the cases the real estate companies have even scrapped their projects even after receiving hundreds of bookings. All this speak large about the absence of regulation in the realty sector and the developers taking the home buyers for a ride. The moot point here is that whether there is any grievance redressal mechanism in the system to protect the hard earned money of the home buyers? After all, buying a house is the biggest investment that one makes in one’s life. Unfortunately, here are very few who attain this feeling of owning a house.
The Model Real Estate Regulation Bill by the Union government is a step in the right direction. However, there is no clarity whether we will see it to get converted into an Act or Ordinance in the near future. Real Estate, after all, is a State Subject and there is strong opposition from the industry to regularize it. Moreover, the government may eventually be forced to set the benchmark for the sector, but it has so far shied away from granting it an industry status. There is a big question mark as to whether the government would be able to force a regulatory mechanism on a sector which has not been given an industry status.
In the absence of any regulation on the sector, it is the home buyer who has always been at the receiving end. Apart from the default on the part of the builder, the whole process of buying a house has always been a cumbersome and tricky affair. The purchaser has to undergo tremendous harassment and has to run from pillar to post to get all clearances from the concerned authorities. There needs to be clarity on the process of buying and selling a house; and not a system where a builder advertises that he needs all white payment in the given project. Does it mean builder is suggesting that black money is welcome in the sector otherwise?
The constant upswing in the real-estate prices has been one of the reasons that force the purchaser to be on guard while purchasing a property. Any lapse or carelessness will jeopardise his investment and the purchaser will not get a property with a good title to pass on to others. A bad investment decision with regard to purchase of property can be avoided if one takes due diligence. In the real-estate business, the value of an asset depends on four basic attributes- utility, scarcity, demand and transferability.
The author is the Managing Editor of Track2Realty