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May 1,2017

Reining in the sharks – OPINION – The Hindu

  • The Real Estate Act largely addresses consumer interests, but some creases are still to be ironed out

    • The much awaited Real Estate (Regulation & Development) Act is now in effect.
    • The Ministry of Housing and Urban Poverty Alleviation recently notified 69 out of the 92 sections in total, which set the ball rolling for States to formulate, within six months, rules and regulations as statutorily mandated.
    • Since land is a State subject under the Constitution, even after the Centre enacts the legislation, State governments will have to ratify them
    • States will have to set up the Real Estate Regulatory Authority’s (RERA) and the Real Estate Appellate Tribunals and have only a maximum of a year from the coming into effect of the Act to do so.
    • The Act’s preamble details the legislative intention which is to primarily protect the interests of consumers and bring in efficiency and transparency in the sale/purchase of real estat
    • Act also attempts to establish an adjudicatory mechanism for the speedy redress of dispute
    • RERA and the Appellate Tribunal are expected to decide on complaints within an ambitious period of 60 days.
    • no legislation can protect the interest of only one class. As one of the largest job creators, the real estate sector contributes almost 6% towards the GDP. Mindful of this, the Act seeks to assist developers by giving the regulator powers to make recommendations to State governments to create a single window clearance for approvals in a time-bound manner.

  • Moving towards transparency

    • Key provisions of the Act include a requirement for developers to now register projects with RERA prior to any advertisement and sale.
    • Developers are also expected to have all sanction plans approved and regulatory clearances in place prior to commencement of sale.
    • The Act again ambitiously stipulates an electronic system, maintained on the website of RERA, where developers are expected to update on a quarterly basis the status of their projects, and submit regular audits and architectural reports

  • Builder grievances

  • While consumer interests have been protected, developers find provisions of the Act to be exceptionally burdensome on a sector already ailing from a paucity of funds and multiple regulatory challenges.
  • The builder lobby has been demanding “industry” status for the real estate sector as it would help in the availability of bank loans.
  • While the Act addresses some of this, it does not deal with the concerns of developers regarding force majeure (acts of god outside their control) which result in a shortage of labour or issues on account of there not being a central repository of land titles/deeds.
  • Once 100% foreign direct investment was permitted in real estate, international money flooded the market. Builders/developers overstretched themselves and diverted funds while some began to cross-invest in non-core activities.
  • Eventually the benefit of any statute is contingent on its effective implementation. Despite a model set of rules, only a few States have notified their rules. The onus is now on States to formulate rules and establish the regulatory authorities on time.
  • Finally, the new legislation is a welcome enactment. It will go a long way in assisting upstanding developers. More importantly, it will ease the burden on innocent home buyers who put their life’s savings into a real estate investment in the hope of having a roof over their head but often find their dreams come tumbling down.

Building holistic ties – OPINION – The Hindu

  • India must continue to engage Sri Lanka beyond mere transactional deals
  • Sri Lankan Prime Minister Ranil Wickremesinghe meeting with Prime Minister Narendra Modi in New Delhi last week, on his third visit to the capital since January 2015, is in keeping with the refreshed Indo-Lanka ties that followed the regime change in Colombo
  • Flagging off partnerships in a host of economic and development projects through a Memorandum of Understanding, the two Prime Ministers have set the stage for long-term collaboration in spheres ranging from energy and infrastructure to special economic zones.
  • Preoccupied with an ever-growing Chinese presence in Sri Lanka, India has been channelling its energies towards countering it, especially focussing on Trincomalee.
  • India and Sri Lanka have agreed to jointly revive a World War II era oil storage facility in the strategically located eastern port town and build infrastructure around it.
  • Frequently faced with political pressures from their rival parties, President Maithripala Sirisena and Mr. Wickremesinghe are only inching ahead in their promise to deliver a new constitution devolving a greater measure of political rights to all its citizens.
  • As a long-time negotiator in Sri Lanka’s political question, India must continue to closely engage on these fronts and build a holistic relationship that transcends the mere transactional.
  • Even as it has pledged $2.6 billion in development assistance to Sri Lanka, India should explore the potential for generating livelihoods in the war-battered northern economy where agriculture and fisheries, its key drivers, are facing a crisis
  • Resolving the long-standing Palk Bay conflict between fishermen of both countries is central to this, and New Delhi must address the valid concern of Sri Lankan Tamil fishermen about incursions from Tamil Nadu into Sri Lankan waters.
  • The more India treats Sri Lanka as an equal partner, the stronger the relationship is likely to grow.