By: Sachin Sandhir, Managing Director, RICS South Asia
In addition to professionalism, enacting laws to enforce high standards of disclosure, transparency and corporate governance within the realty sector are also needed in order to minimize investor risk. Specifically with consumer interests in mind, there must be a redressal or complaint handling mechanism that provides much needed recourse against customer grievances.
So while this aspect is being addressed in the model real estate regulation bill, the current framework will need to be a lot more robust in indicating who and how disputes will be resolved. To this end, the regulator could look at identifying an ombudsman who would be responsible for adjudicating dispute cases, much on the lines of the SEBI Ombudsman regulations and Banking Ombudsman Scheme set up under the aegis of RBI.
Also, given the competitive and highly risky nature of construction activity, there is a growing need to transform relations amongst industry stakeholders and the approach to building activity in order to improve the overall quality and efficiency of the sector.
Thus transparency needs to be introduced on different fronts. With respect to government agencies and the development community, a reform in the building approval mechanism is crucial, especially given the extended timeframe within which a number of building regulation requirements and approvals are obtained, prior to which no development activity can take place.
Thus more-often-than-not delays in project completion and delivery timelines have become the norm given the bureaucratic set-up within which most clearances need to be acquired; subsequently leading to an additional cost of approximately Rs. 500 to Rs. 2000 per square foot for construction projects.
