Real Estate Sector - Inputs on Root Causes

Dear Friends:

Below is a summary of key issues highlighted by you in the Real Estate sector of India. Please take them time and identify Root Causes to these issues by responding to this post.

Once we have listed the root causes, we will identify solutions to them via a separate post. Our objective is to submit a white paper to the associated sections of the Government so appropriate actions can be taken to reform this sector and make things better from a citizen perspective.

I look forward to your inputs!
Rajendra Pratap Gupta
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Real Estate Sector – Key Issues

1. This is one sector which is most unregulated and there is big nexus between builders, politicians and bureaucrats
2. Major delay in possession
3. Open bribes are asked for at the time of registering the property
4. Stamp duty is pretty hefty
5. Non-compliance of building laws
6. Properties handed over to customers without proper certification
7. Black money being used as cash for purchases
8. Fertile land converted to plots
9. Low quality materials used for construction
10. No regulation for pricing – price decided by word of mouth
11. No single touch point to verify the authenticity of the project one is going to invest in
12. A lot of projects falls prey to some or the other fraud
13. Builders Agreement is generally one sided in their favour
14. Builders appreciate the prices drastically
15. Fly by night developers are fleecing the unsuspecting public. For each project they create a new company and afterwards go bankrupt
16. Bank loan are provided on a high rate of interest
17. People are forced to show the reduced value of the transaction as the seller doesn't want all the money in white
18. Encroachment on government land
19. Insufficient parking spaces
20. Builders don’t want to build affordable houses since profits there are low
21. Builders complete buildings and collect all money but delay amenities indefinitely and there are no penalty clauses for such delays
22. Connecting roads/interior roads of complexes are poor in quality
23. Car park is sold by builders though banned by government
24. No single policy for unauthorized constructions more