State of Land/Real Estate Transactions - Inputs on Solutions
Dear Friends:
Below are the Key Root Causes and Issues as highlighted by you on the State of Real Estate/Land Transactions in Delhi.
Please review and help identify specific solutions that need to be implemented to make Land/Real Estate Transactions more transparent and affordable.
We look forward to your inputs!
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Land/Real Estate in Delhi - Key Root Causes
1. There is a strong nexus between the builders and the police
2. Builders deliberately create confusing agreements to keep themselves protected in case of a dispute
3. Lack of Government regulations which would push the builders to deliver possession on time
4. Lack of a law against the use of cash in property purchases encourages use of black money
5. MCD officials accept bribes and let unauthorised construction happen
6. Many politicians have a stake in construction companies
7. Unauthorized construction and encroachments are fundamentally encouraged by politicians for their own monetary benefits as well as on account of vote bank politics
8. Builders divert large portion of money received as advance from a project and use that money to build land bank and launch new projects instead of first completing the project for which they have received the advance
9. Real estate advisers are primarily brokers / brokerage houses. Their only interest is in pushing the sales of projects where they are getting commission
10. Terms and conditions document is never read or understood by buyers. They just sign on the dotted lines
11. Huge mismatch between demand and supply. That leads to ridiculously high market rates, which also lead to usage of black money
Land/Real Estate in Delhi - Key Issues
1. Builders don’t finish the construction in the promised time frame
2. A lot of real estate advisors turn out to be frauds
3. Too many terms and condition always confuses the customer
4. Possessions are not given on time
5. Land mafia encroaches on Government land
6. Huge difference between circle rates and market rates thus leading to generation of black money and loss of stamp duty
7. Builders do not adhere to terms and conditions and hence no regulations in absence of any regulatory authority
8. Not enough parking spaces built with residential apartments
9. Huge amount of cash transactions take place in real estate purchases
10. Unauthorized construction all around Delhi is creating a menace more
Below are the Key Root Causes and Issues as highlighted by you on the State of Real Estate/Land Transactions in Delhi.
Please review and help identify specific solutions that need to be implemented to make Land/Real Estate Transactions more transparent and affordable.
We look forward to your inputs!
--------------------------------------------------------------------------------------------------------------------------------------
Land/Real Estate in Delhi - Key Root Causes
1. There is a strong nexus between the builders and the police
2. Builders deliberately create confusing agreements to keep themselves protected in case of a dispute
3. Lack of Government regulations which would push the builders to deliver possession on time
4. Lack of a law against the use of cash in property purchases encourages use of black money
5. MCD officials accept bribes and let unauthorised construction happen
6. Many politicians have a stake in construction companies
7. Unauthorized construction and encroachments are fundamentally encouraged by politicians for their own monetary benefits as well as on account of vote bank politics
8. Builders divert large portion of money received as advance from a project and use that money to build land bank and launch new projects instead of first completing the project for which they have received the advance
9. Real estate advisers are primarily brokers / brokerage houses. Their only interest is in pushing the sales of projects where they are getting commission
10. Terms and conditions document is never read or understood by buyers. They just sign on the dotted lines
11. Huge mismatch between demand and supply. That leads to ridiculously high market rates, which also lead to usage of black money
Land/Real Estate in Delhi - Key Issues
1. Builders don’t finish the construction in the promised time frame
2. A lot of real estate advisors turn out to be frauds
3. Too many terms and condition always confuses the customer
4. Possessions are not given on time
5. Land mafia encroaches on Government land
6. Huge difference between circle rates and market rates thus leading to generation of black money and loss of stamp duty
7. Builders do not adhere to terms and conditions and hence no regulations in absence of any regulatory authority
8. Not enough parking spaces built with residential apartments
9. Huge amount of cash transactions take place in real estate purchases
10. Unauthorized construction all around Delhi is creating a menace more
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View all 21 comments Below 21 comments
There is no minotering mechanism available. There is a very big nexus between builders and police/MCD otherwise illegal construction is not possible. Construction of a house does not take place within a night or day. It takes months and can not be oversighted. more
Mar 27
The one real problem (all others pale into insignificance) is the huge amount of black money involved in land purchase and sale transactions. The reason for this is the presently opacity associated with political party funding. The only sensible way forward is to remove all bans and bars on the sources from which parties can receive funds - AAP has made a terrific start. Thus all money received by parties, big or small, must be reported. This will help ensure that all political funding is visible to the public. And this, in turn, will obviate the need for money not accounted for. In the meantime, it would be a good idea to at least double the circle rates immediately. All the other ills associated with real estate will b cease to occur. more
Mar 26
Collusion is not so much between buikders and police..... but builders and Municoal Governments who are supposed to oversee builders and enforce e lawst more
Mar 25
Since land is scarce resource, let there be a law on land/houses in India/Delhi that: One adult individual/family can possess only one residential and/or one commercial accommodation in a village/town/city, that too not more than 100-250 sq.metres per family, if for residence. All investments on land/buildings(other than the above, n other than land for agri. cultivation by the tiller himself,or land for entrepreneurial/industrial use or for development into residential/commercial markets/colonies/flats)should be made illegal from some future date. This will solve all related problems. more
Mar 25
Some possible solutions: 1. A standard agreement to be generated by government agency. Agreement would be drafted for protection of both Builder and Buyers. Builder can enhance it to give more flexibility / facilities to buyers but not reduce anything. In case of any conflict between builder generated agreement and standard agreement, terms in standard agreement would prevail. This agreement needs to include protection against arbitrary changes in size / layout by builders. Also there should be clear requirement of builder publishing the actual Carpet Area along with the mythical Super Area of construction. 2. When a project is launched, total estimated cost of completion is to be published by builder. This amount cannot be too low either and has to be calculated using standard guidelines. All the advance / purchase money received has to go into account from which only the costs of current project are to be met. Till the builder has received at least this much amount, no money from current project can be diverted for any other project of builder, especially for launch of new project. This will prevent builders from launching new projects at the cost of existing ones. 3. Delay payment clause to be automatic and part of standard agreement. Builder should not be allowed to modify it in any manner whatsoever. Once delay clause is kicked in, there needs to be automatic requirement for payment of penalty on builder, with the onus of proof also lying on builder for payment. 4. Whenever there is any project that does not meet standard guidelines like sufficient parking space / "open space in appropriate manner", the approving official needs to be immediately held accountable. At the same time there has to be protection against witch-hunting so that honest officials can do their job. 5. Once any unauthorized construction is detected, local officials tasked with prevention who did not prevent the construction, should be automatically held accountable. It is not complex process and can be done quite easily, should there be will to do that. 6. Real estate advisors / brokers need to be registered and need to publish their registration number in their advertisements. 7. From our past experience we have clearly seen that DDA is incapable of meeting the required demand. We need suitable private players in the construction of flats in Delhi. 8. Of course, all the suggestions are useless in the absence of suitable regulatory and enforcement authority. more
Mar 25
