Personal Finance

`Reality shows' queer pitch in Kerala

Vinson Kurian | Updated on February 19, 2011

Lack of a regulatory mechanism works to the advantage of unscrupulous developers.

Realty players in Kerala will do well to write their ?reality cheques' just in case the regulator, although long time in the making, moves closer to putting under a ?stress-test' the attributes, if at all, of integrity, trust and reputation.

Both Mr S. Reghuchandran Nair, Secretary-General of the Kerala Chapter of the Confederation of Real Estate Developers of India (Credai), an apex body of private real estate developers, and Mr K. Srikant, Chairman, Skyline Foundations and Structures (SFS Homes) and a former State chairman of the Builders Association of India (BAI), are outspoken advocates of the proposed Real Estate Regulatory Act (RERA) hanging fire for sometime in Parliament.

The Union Ministry of Urban Development had been on record for quite sometime saying that the Act was being finalised and scheduled to be tabled in Parliament. But protests by various builders' lobbies and associations over certain strict clauses in the draft Bill have kept the proposed legislation in a limbo.

`Incredible' Jackpot

Mr Nair avers that fly-by-night operators and other unscrupulous players who offer freebeesin the recurring 30-second slots in countless TV reality shows, are gnawing away at the vitals of the quality and credibility edifice that serious and brand-conscious players have assiduously built up over a sustained period in the State .

For instance, garrulous bytes about the jackpot offered for winners of these shows are totally at odds with the known income of these players.

Conventional methods and practices to crunch corporate numbers are observed in their breach and, more often than not, the prizes on offer go to beat the size of even the respective balance sheets.

A number of the ?reality show' players are far from being real with their offers of upwards of Rs 1 crore (or the equivalent in built-up space) . A conservative estimate is that Rs 50 per sq ft, or at the most Rs 75, is the leverage that a property developer can afford to apply for advertising ? and this includes outdoor, brochures and every other conceivable mode of publicity. But this is beaten many times over by upstarts in their frenzied bidto hog the limelight.

Asked if Credai has checked the veracity of the claims of these promoters, Mr Nair was non-committal but said that this is something that could reveal startling facts. Passing of the proposed Actwould force every player to fall in line, conform to various codes therein and confirm allegiance to them in letter and spirit.

LACK OF INTENT

Mr Srikant, too, was unsparing in his criticism of the ?seedy players' who are ?out to kill' the trust and reputation that serious players enjoy with investors.

A trip down the city thoroughfares is enough to assess the intent of purpose, or the lack of it, shown by these players as revealed either by structures on which work has either stopped or have been allowed to idle and left to the mercy of the elements, he says.

The RERA will bring in the much-needed entry barriers for prospective entrants to the industry. It will also aim at checking various malpractices in the industry and solving the grievances of stakeholders.

This is sought to be achieved by bringing all agencies and developers under the regulation and bring transparency into the system, Mr Srikant said.

At present, there is no system to protect property buyers against unscrupulous real estate developers and illegal buildings.

STATE SUBJECT

The purpose of the proposed Act is to promote planned and healthy real estate development. The regulation of activities of property developers and builders in India is a State subject, which explains the presence of multiple centres for issue of licences and monitoring.

This has led to inconsistencies not least represented by rules and regulations being followed in governing, constructing, purchasing, transferring and leasing of properties.

The RERA aims to mend these inconsistencies and focus on the well-being of the property purchaser. It also proposes to establish a regulatory authority to control and promote the construction, sale, transfer and management of colonies, residential buildings, apartments and other properties.

Published on February 19, 2011

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