Dr. Justice. AR Lakshmanan Lecture on ‘Property Related Issue of NRLs / PIOs’
On account of
the recent increase in the building construction activities in the recent
years,
many disputes
have arisen between the owners of the land and the developer and also the
prospective
buyers.
Most of the
building contracts have in-built provisions for referring the dispute between
the parties to the Arbitration and as to who is to be appointed as the Arbitrator.
The construction industry is the second largest industry
in the world, being next to
agriculture. Thus, it has become necessary for the people
who are engaged in the nation building activities like engineers, architects
and contractors, to know the essential legal provisions.
Apartment
Ownership Act..!
Some of the
State Governments like Maharashtra, West Bengal, Gujarat, Karnataka, Uttar
Pradesh and
Delhi have enacted laws like Apartment Ownership Act or Ownership Flat
Act.
These laws vest the State Government with powers to
intervene and settle disputes with the seller and buyer of apartments.
Very often, the
promoter does not disclose his title to the
lands on which flats are constructed. Even the encumbrances over the lands are
not disclosed. There are many cases where
there is
great deviation from the sanctioned plan of the Town
Planning Authorities.
After the sale of the flats, the promoter disappears from
the scene and the purchasers are left alone to fight against the Town Planning
Authorities, who threaten to demolish the building.
Consumer
Protection Act..!
Sales tax is
collected by the promoters but the same is not remitted to the State and the
promoter goes to a court of law and gets stay of the order demanding payment of
sales tax. No doubt, the Consumer
Protection Act provides some relief to the buyers
of flats.
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| Dr. Justice. AR Lakshmanan |
However, the
best course would be for the State Government to take a notice of the existing
state of affairs and the helpless condition of the buyers of flats and bring about suitable legislations containing
the form of contract entered by the
buyers of flats and promoters, licensing of promotions, etc.
This would go a long way in reducing the number of disputes
between the flat
promoters and
buyers. Very often it is found that the promoters do not complete the
construction on time or hand over the same to the
buyers. The
disputes in building contract and flat promotion are on the
increase. It is imperative to find suitable remedial measures to settle such
disputes
speedily and
satisfactorily.
It is of
importance that you have to highlight not only the
irritants but also come out with specific suggestions to the Government as to how
to augment its resources which are so essential to a welfare state such as
ours.
Public opinion
is a significant force in any democracy.
Chambers of
Commerce and
other industrial and trade associates must cultivate it by organizing
conventions like this and earn the goodwill of the Government as well as the
public at large.
Indian Real
Estate has in the near past achieved the status of an immense industry in
itself. With high scale developments happening not only in the metros but also
the tier II and tier III cities, the Indian Real Estate Market is coming into
its own.
Trends of the last few years suggest that that booming real
estate has made property developers
billionaires overnight, with profit overflowing in the sector. In the last one
year office and shopping
mall rentals continued their upward trend, the pace being very vigorous in
Delhi and
Mumbai. At
present, Mumbai is at the second place in
the list of most expensive office markets in the world with Delhi at eighth.
Cheaper Houses...!
Most important
is the housing problem for the weaker section that the government is trying to
tackle. So, a policy should come into existence where the economically weaker
sections get cheaper houses.
The builders should be given subsidies to build for them.
And finally all
bottlenecks in terms of legislations, sanctioning, implementation,
administration of
the projects
etc. are streamlined and are made favourable to both consumer and the builders.
Clearly, the
Indian property market is growing by leaps and bounds. However, the credit also
goes to the government which has been taking several important steps to draft
new policies in order to push investments in the sector.
This includes
liberalization of foreign direct investment (FDI) in real estate and
introduction of the SEZ Act.
To talk about SEZs, a high proportion of supply of IT/ITeS
space will come
from the
development of Special Economic Zones
(SEZs). The available space in these tech-enclaves is likely to reduce the
appeal of STPIs, as both builders and
occupiers will enjoy substantial tax benefits within the SEZs.
The builders should be given subsidies to build and finally,
all bottlenecks in terms of legislations, sanctioning, implementation,
administration of the projects etc. should be streamlined and made favourable
to both consumer and builders. Residential has always been the area of major
concern as it directly impacts the lives of the majority, i.e. the middle
class.
Demand for Housing
Loans..!
One of the main
reasons for the ups & downs in the real Estate market is the loan
rates and financing. The demand for housing loans is
bound to go up because of falling interest rate and stable prices they opine.
In the recent
past there were many steps that the government has taken to make sure that
the Real Estate
Sector is transparent and has policies in the pipeline to regulate the sector.
“Real Estate
should be treated as a long term investment as investors always gain by a
healthier margin
in the long run.”
Real Estate
sector is always tidal in nature but as infrastructure grows, this sector is
bound to grow till it gets consolidated like in Developed Countries.
Lack of concrete
Government policy, lack of sound knowledge of the entrepreneur in this
industry and
non-transparency in land acquisition have made this industry fragmented
however it is
recovering and changing.
There should be a regulatory authority to look into the problems
arising in this industry, which should protect entrepreneurs as well as
consumers.
Perfect planning
in all realm of life is necessary. Development comes through planning,
which ultimately
results in overall growth of society.
Src: March 2013, Our
Building & Construction
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