By: Sachin Sandhir, Managing Director-South Asia, RICS
Track2Realty Exclusive: We are all well aware that the Indian real estate and construction sector is predominantly unorganized and fragmented and lacks professionalism. Given the free reign provided to stakeholders, consumers have often been at the receiving end of misconduct and malpractice indulged in at the hands of both developers and brokers with no mechanism available for redressal or recourse.
While it is true that not all practitioners indulge in such activities, the realty sector has earned a tarnished reputation as a consequence of these so called ‘rotten apples which spoil the entire lot’.
Undoubtedly, a degree of change in the perception towards the sector has set-in with international real estate consulting firms commencing operations in the country and offering professional services to clients which instil a higher degree of confidence in the property market.
However, a majority of property transactions are limited to the residential sector where such consulting firms are yet to foray and consumers have no choice but to deal with brokers who transact deals. Given that brokers are neither registered nor regulated, the risk associated with the real estate sector is relatively high.
Real estate is probably the only sector in India that lacks any form of regulation at present. All other sectors like insurance, banking, accounting etc. have an apex body that oversees its functioning and performance and stipulates guidelines for its practitioners.
In stark contrast to countries such as the UK, US and other developed nations there is an absolute lack of accountability in India, where for years we have just been deliberating on whether there is a need for a realty regulator.
In my opinion, as I have often pointed out on this pertinent issue, the question is no longer on whether we need a regulator, but on the fact – that in what shape and form should regulation be imposed and who should fall within its purview.
Real estate markets in countries like South Africa, US and UK can serve as role models where the sector and practitioners are regulated through legislation, voluntary schemes and self regulation across all key activities of town planning, building control or building development, regulation of property transaction activities of which estate agency or brokerage services are an important element.
