For buyers as industry stakeholders, the biggest advantage that the Model Real Estate Regulation Act offers is that there will be an arbitratory body available to attend to grievances and redressals. I do not agree with the general perception that the Model Real Estate Regulation Act is harsh on builders.
A regulator is, by function, impartial and will take into consideration the entire industry and its various stakeholders. The arbitratory body will benefit them as much as consumers, since they will have official advocacy on their issues. To my thinking, this is a far more beneficial to them than tabling their demands and grievances before every Union Budget and having them ignored.
To illustrate – the Directorate General of Civil Aviation (DGCA) mediates between all stakeholder configurations, including airlines and airport operators, airlines and passengers, fuel providers and airline operators. In other words, the DGCA does not exist solely to benefit passengers or airline operators. It addresses unfairness at all levels and has the power to intervene and rectify on any stakeholder’s behalf. If the Model Real Estate Regulation Act introduces a universal regulatory and arbitratory body, it should be sufficiently empowered and mandated to solve discrepancies and work towards the common good of the entire industry.
Again, I am not on the same page with developers who fear that this Act will add yet another layer to an already complex mess of regulations that they have to contend with. In fact, a centralized regulatory Act will smooth out the complexity and make life easier for them. Obviously, each state will have to adapt it according to its own specific laws pertaining to land ownership, development and acquisition of property. To a significant extent, the Model Real Estate Regulation Act can help to standardize the multiplicity of state laws that exist now.
This Act can potentially boost transparency in the Indian real estate sector by standardizing practices and streamlining Government procedure systems. Again, this would work in favour of developers rather than against them. The Act can help bring about a greater level of trust between buyers and sellers, landowners and developers and also developers and the financial institutions that fund them.
Finally, I see this as a big step in the direction of recognizing Indian real estate as an industry, since it means that the real estate sector is perceived to have attained a certain degree of scale which warrants a regulatory agency with transparent rules, regulations, safeguards and redressal systems.
The author, Anuj Puri is Chairman & Country Head, Jones Lang LaSalle India
