The real estate bill, recently adopted by the cabinet, seeks to register brokers or agents. While this would bring in some accountability, its effectiveness may fail in implementation given our experience of other regulators
The Union cabinet on 5 June 2013, cleared the Real Estate (Regulation and Development) Bill 2013, which seeks to create a Real Estate Regulatory Authority (RERA) and an Appellate Tribunal (AT) that will act as a watchdog for the real estate sector, set up specifically to protect consumer interests and redress grievances. The bill also mandates the registration of real estate brokers. In India, real estate agents could be anyone who makes buyers and sellers meet. This means that from a paanwala to a tailor to a scrap metal dealer, anyone can be a real estate agent. Would all of them fall in line and register with RERA? This would be quite a challenge.
In a Moneylife Foundation seminar on the Real Estate Bill, Pranay Vakil, one of the most respected names in the real estate industry and former chairman of Knight Frank India, said, “Though this is a step in the right direction, what is not clear is whether this would be a generalised registration or whether it would be for a specific project. The reason being, the developer has to disclose to the authority the name of the real estate agent. Every time a developer changes a real estate agent he would have to contact the authority to get the name changed on the website. One would still have to wait for the bill to know as to what are the exact qualifications that are required to register as a broker.”
The Bill proposes to register real estate agents which have hitherto been un-regulated, with clear responsibilities and functions, thereby leading to money trail and curbing money laundering. This clause has been added on the recommendations of the Department of Revenue, Ministry of Finance. The registration of brokers would bring some accountability in to the system. Consumers would be more confident as there would bring in credibility of the broker as well. At present, any person can become a real estate agent with no professional certification or licensing for specific areas of operation.
Over the past few years, brokers have been dominating the transactions market. They lure customers with ‘special’ discounts, another reason why consumers too prefer going through a broker than direct to a builder. Builders too, are dependent upon them for sale. Usually, they form groups to achieve their targets. Once they form a contract with a developer to sell a particular number of flats within a project, they will focus only on that. At the end of the day, the broker would favour the developer.
The new law may try to make all agents register, but would it be able to crack down on those who continue to operate unregistered? Will the authority be able to identify these agents and punish them?
Even after registration, there would be issues of enforcing fair conduct. In the financial sector despite strict regulations by Securities and Exchange Board of India and the Insurance Regulatory and Development Authority there have been numerous cases of mis-selling. Therefore, it would also need to be seen whether the regulation of real estate agents would be a workable model. If the real estate regulator is lax, the registration of real estate brokers would be a much-needed by a wasted effort.
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The 77-year-old monk said the world is facing a moral crisis of inequality and suffering and needs leaders who can bring compassion to their post and in that respect, biologically, females have more potential
Tibetan spiritual leader the Dalai Lama has said that his successor may be a woman as women have the all qualities needed in leaders.
Speaking with reporters, ahead of his 10-day tour of Australia, the Nobel Peace laureate said, “If the circumstances are such that a female Dalai Lama is more useful, then automatically a female Dalai Lama will come”.
The spiritual leader is scheduled to speak in Sydney, Melbourne, Adelaide and Darwin.
The Union Cabinet has cleared the Real Estate (Regulation and Development) Bill, 2013, however, it is not yet available in the public domain for reasons best known to the government. The only Bill available on the web is a draft of 2011
The real estate sector is a critical driver of economic growth and one of the messiest in India. It is smothered in red tape, yet has the biggest black money problem. As we all know, every politician has resisted creating a real-estate regulator for the past two decades. Even today, we have a funny situation. All the excitement created by the cabinet clearance for the Real Estate (Regulation and Development) Bill, 2013 turned out to have a big catch. The Press Information Bureau (PIB) put out a detailed press release but no Bill. Even as of today, the Ministry of Housing and Urban Poverty Alleviation, shows the draft of the Bill modified in December 2011, on its website.
According to reports, 22 states had given their approval to the Bill while five states wanted certain amendments. These changes have been incorporated in the Bill cleared by the Cabinet. Chhattisgarh is the only state to still oppose the Bill, the reports say.
While we do not know what Bill the union cabinet has sanctioned, but here is a copy of the Bill...
Read more about the Real Estate Regulation Bill: