How can real estate be real?

Housing sector initiatives in India - the beginnings. Housing as a priority was pushed to the front line in 1954 when the National Building Organisation (NBO) was set up by the Government of India for laying down plans and policies to promote housing to the homeless. The private sector got into the act in a big way when construction people set up real estate outfits eyeing the vast scope in the field. While the Government concentrated in providing budgetary plans through subsidised schemes, the private promoters and builders set their mind on providing posh apartments and luxurious living to the upper class. Market promotion Sales campaigns and marketing strategies came to the forefront, supported by glossy advertisements attracting the buyers. Banks and financing institutions stood in bee-line with schemes for providing loans on attractive and ‘liberalised’ terms. Some typical advertisements read thus: “Builders’ ads; Paradise regained in your new home; Luxurious living in nature’s lap; Buy an apartment and enjoy the facilities of a villa/resort; The address of royalty; The bank ads said, ‘Smart home loans,’ ‘No down payment,’ ‘Lowest interest,’ ‘No hidden charges,’ ‘Tailor-made facilities,’ ‘EMI as low as Rs. 499,’ etc. There have been hardly any who questioned the veracity of these ads. Tighten process As in many other cases, the administrators and law makers did not find any role for them in the field till things went wrong in the form of customer complaints, legal tangles, non-performing assets in banks, irregular constructions and so on. Even then, rarely there has been any direct confrontation with the perpetrators of the problems. Only the Reserve Bank came on the scene, through the banking system, to tighten the loan dispensation process. The proposed regulatory legislation too is yet to become a reality. Who is to ensure fair practices? There are many organisations of players in the real estate market, like the Ownership Apartment Promoters’ Associations at different State levels, Confederation Of Real Estate Developers’ Association Of India and the like. Code of ethics Some States have even enacted legislations, such as, Karnataka Ownership Of Flats (Regulation Of Promotion, Construction, Sale, Management and Transfer ) Act, 1972, and the Haryana Urban Development Act. It is reported that the Associations of Promoters/Builders have laid down code of ethics. State legislations have penal provisions against non-fulfilment of the provisions and rules laid down. In some centres, there are organisations of owners of sites and apartments working for protecting their members’ interests. If only all the Players and Regulators ensure implementation of rules and regulations and follow ethical practices, the real estate market can be a fair market. Further, the Government should not see the sector as a revenue spinner by raising the guidance value, cost of stamp duty and registration from time to time, escalating the cost, leading to unfair practices. Play fair If “real estate has to be real” each one of the players should play fair. The buyer should also value his money- even borrowed money. He has to avoid falling prey to the glossy ads and false promises, but does his home work well, before entering the field.