Can realty be free from fraud­u­lent prac­tices?

RE­FORM Stake­hold­ers in the real es­tate in­dus­try share in­sights on what the in­dus­try has set it­self free from

Hindustan Times (Chandigarh) - Estates - - FRONT PAGE - Nam­rata Kohli let­ters@hin­dus­tan­times.com n

Mile­stone birth­days are oc­ca­sions to re­view, as­sess and in­tro­spect. As In­dia turns 71 this In­de­pen­dence day, we ask a cross sec­tion of peo­ple on what is the one thing that the in­dus­try has fi­nally freed it­self of and what is the free­dom it still yearns for!

Ac­cord­ing to 42 year old Gur­gaon based man­age­ment con­sul­tant De­vansh Dutta- “The govern­ment has ag­gres­sively pushed a cul­ture of trans­parency through mea­sures such as de­mon­eti­sa­tion, Goods and Ser­vices Tax (GST), Real Es­tate (Reg­u­la­tion and Devel­op­ment) Act, 2016 (RERA) and Be­nami Prop­erty (Pro­hi­bi­tion) Act. These land­mark pol­icy and leg­isla­tive changes will even­tu­ally set the in­dus­try free from cor­rupt prac­tices and help re­store our con­fi­dence.”

For Sam­ridhi Tal­war who had in­vested in Noida in one of the projects that went in for In­sol­vency pro­ceed­ings and liq­ui­da­tion and had feared the worst, the sys­tem did come to the res­cue. “The projects seemed a far cry from com­ple­tion. But when ju­di­ciary took a tough stand against big names such as Jaypee, Unitech, 3Cs, Am­ra­pali our faith is re­stored. We yearn for free­dom from such un­scrupu­lous builders and this kind of ex­am­ple-set­ting should send a strong mes­sage to de­fault­ers.”

She adds that the thing to cheer about and cel­e­brate is the new In­sol­vency and Bank­ruptcy Code (IBC) whereby the NCLT treats home­buy­ers as fi­nan­cial cred­i­tors. “The govern­ment re­cently pro­mul­gated an Or­di­nance to amend the IBC and treat home buy­ers in ail­ing real es­tate com­pa­nies on par with banks in the res­o­lu­tion process. This Or­di­nance em­pow­ers even a sin­gle home buyer to ap­proach the Na­tional Com­pany Law Tri­bunal to ini­ti­ate in­sol­vency pro­ceed­ings against a re­al­tor. This em­pow­ers the or­di­nary buyer and gives him teeth.”

Pend­ing de­liv­er­ies of past projects, has been a sig­nif­i­cant pain point in the last sev­eral years. Ac­cord­ing to a re­port by PropEquity, hous­ing projects in In­dia worth Rs 3.3 lakhs crores ($47 bil­lion) are await­ing ex­e­cu­tion.

Many of these projects were launched 2009 on­wards and most of these are de­layed by eight years al­ready, stalled at struc­ture level and mar­ket­ing of it has stopped.

Ac­cord­ing to PropEquity Founder and MD Samir Ja­suja, “Free­dom from un­eth­i­cal prac­tices of some de­vel­op­ers who tend to bring a bad name to the en­tire in­dus­try is the need of the hour.” He adds that for­tu­nately, we are now wit­ness­ing green shoots of re­cov­ery for the projects which are not stuck and sales have in­creased for ready and near­ing com­ple­tion projects. De­vel­op­ers con­cede that there have been “quite a few rot­ten ap­ples” and as Avneesh Sood, Direc­tor, Eros group says, “I think it’s time for us the de­vel­op­ers to make the home buy­ers feel free from all the un­pleas­ant no­tions that they have for the builders. With the in­tro­duc­tion of RERA, it has helped us to break that no­tion. This Act has given wings of free­dom to our home­buy­ers.”

To­days’ home­buyer, in a nut­shell, looks for­ward to an in­dus­try that is pro­fes­sional and eth­i­cal, with fo­cus on qual­ity con­struc­tion and timely de­liv­ery and is free from un­scrupu­lous prac­tices such as one sided con­tracts, de­layed de­liv­er­ies etc.

What is the free­dom de­vel­oper com­mu­nity has got so far? They have been lib­er­ated from hith­erto held pre-con­ceived ideas of luxury and pre­mium hous­ing be­ing the fash­ion­able seg­ment and the “sta­tus sym­bols” to­wards a more un­bi­ased and prac­ti­cal ap­proach of fo­cus­ing on the mid-end and affordable hous­ing seg­ments. An in­vestor frenzy in the early part of this decade in­spired a pro­longed fo­cus of de­vel­op­ers in launch­ing life­style projects tar­geted at the pre­mium seg­ment at pro­gres­sively higher prices. This later be­came un­sus­tain­able even as the mar­ket moved from an in­vestor’s par­adise to an end user mar­ket.

The no­tion of size of homes has un­der­gone a sea change. There is free­dom from ear­lier held no­tions of “the big­ger the bet­ter” and “life­style homes” to “small but func­tional homes.” To­day, small is beau­ti­ful. There has been a con­certed ef­fort by de­vel­op­ers to de­crease ticket sizes by con­strict­ing unit sizes and re­duc­ing prices in re­sponse to the mar­ket’s de­mands. It’s a pe­riod of sta­bil­i­sa­tion, right-siz­ing and right-pric­ing of new res­i­den­tial prod­uct, as a re­port from Knight Frank points out.

More­over the govern­ment’s ‘Hous­ing for All scheme by 2022 and the grant­ing of in­fra­struc­ture sta­tus to the affordable hous­ing sec­tor have also pro­vided the ne­c­es­sary im­pe­tus to these un­der-rated and un­der­served seg­ments of the mar­ket. The spokesper­son from Min­istry of Ur­ban af­fairs says PMAY, the world’s largest hous­ing pro­gramme of build­ing 11 mil­lion affordable homes for ur­ban In­di­ans by the year 2022 is the high­est-pri­or­ity scheme as it brings the big­gest change in the lives of the poor peo­ple by giv­ing them their own house.

MINT/FILE

Pend­ing de­liv­er­ies of past projects, has been a sig­nif­i­cant pain point.

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