Regulating the Real Estate Business

Ever wonder why the real-estate market is not regulated in India. Simply put, there's too much money in this sector not to regulate this market. Real-estate directly and indirectly contributes to more than 40% of most wealth sharing.

Yet micro interests dictate the industry to the disadvantage of the vast majority. I do hear voices from mature Developers, Brokers, Regulators asking for some sort of regulation however, no credible regulatory framework has been assigned.

Code of conduct drawn up by wise participants are all shared on superficial basis as a marketing tool. Code of conduct needs to be adopted for fair practices comprising of fair pricing, fair compensation, fair negotiations, fair adjudications and fair justice for all stake-holders.

Are there any real benefits for the industry if this gets regulated or should they fight for self-regulation? To my mind, self-regulation is only possible in an advanced society which is aware and has ways to enforce their rights in a timely manner within a judicial frame-work for timely justice. That kind of brings a Utopian picture to mind. Therefore, in my limited perspective we need to be governed by the law of the land enforced through a Regulator who is well-versed with the issues and has powers to enforce.

The service providers of the Industry, the army of Developers, Brokers, Contractors, workers will benefit from an image make-over brought about by transparency and demonstration of right conduct. This will get easier and cheaper funding from Banks who will be able to trust the industry, better valuations in the stock market for the industry who provide high level of services in a transparent manner.

That said, self regulation will still remain important for Companies and Individuals who value their name and enjoy the trust of their customers thereby bringing more loyalty and referral business.

Let's try that for now. Having a Statutory Regulator is now a question of "when" and not "If".

Take care..until the next time, Anjan