The clamour for better enforcement in the real estate industry is louder in Tamil Nadu than ever before, following the collapse of the building in Moulivakkam that caused 60 fatalities and injured a further 27. The disaster has suddenly awakened us to the brutal consequences of permitting developers, especially those who are inexperienced, to construct high-rise buildings in areas where the soil and other factors have not been tested. Perhaps it is time that we cut our losses and came up with strong new initiatives, like Maharashtra has done by setting up its own housing regulatory authority.
Says advocate G. Shyam Sunder, author of a book on property registrations and land records, “All the rules are in place; rules that stipulate that buildings must be constructed a certain distance from water bodies, that they must not be too close to railway tracks… etc. It is enforcement that is clearly lacking.” He talks of how even developers with a bad track record can continue working.“Even if a developer is penalised several times for faulty constructions, he is free to continue building and seek approvals, as there is no formal record maintained to track his work,” says Shyam Sunder. The solution, according to the advocate, is to create a regulatory authority to supervise proceedings more efficiently.
Incidentally, a national bill of this kind has been in the pipeline for many months now. The reason it hasn’t yet been approved, according to Chitty Babu, Chairman & CEO, Akshaya Homes, is because the UPA did not do a very good job of formulating it. “It requires a complete overhaul,” says Chitty Babu.
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“It focusses only on developers and for some reason seems to exclude all other parties involved in the real estate industry. Why are financial institutions that provide the funding and the government authorities that sanction approval exempted? All the stakeholders must be brought under the purview of such a bill.” Chitty Babu has his reservations about the Maharashtra method, as he thinks a central government bill will avoid the confusion arising out of several states having their own versions. He also believes that the CMDA (Chennai Metropolitan Development Authority), which has recently come under much criticism, must be allowed some respite. “We cannot blame the CMDA” he says. “I don’t believe that it is equipped with the necessary human resources to conduct periodic quality checks, clearances and inspections.”
This only emphasises the immediate need for a hard-nosed real estate regulatory authority for the state. Despite repeated attempts, CMDA officials remained unavailable for comments on this topic. Meanwhile, the Confederation of Real Estate Developers’ Association of India (CREDAI) has provided the government with a list of changes to be adopted into its upcoming real estate regulatory bill. N. Nandakumar, President – Tamil Nadu, CREDAI, says, “Among other things, we have also expressed our reservations over insisting that personal permission is still needed for real estate projects.
Considering that a developer can apply online with all the necessary documents, I don’t see the reason for further human intervention, as it only slows the process.”
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He is all for an overarching regulatory authority, as he believes that it is important in the interest of growth. The failure of the present system, in his words, “is how the track record of a developer hardly plays a part in influencing the buyers’ decision. People are purchasing real estate based on the price and location. It is such a system that has caused the Moulivakkam tragedy.”
Nandakumar believes that Maharashtra has done a commendable job by not simply waiting in the wings for the proposed national real estate bill to get approval. “It is great that Maharashtra has been proactive, and believes that it has the ability to regulate itself,” he says. Won’t it cause confusion, though, should the national bill be different in its formulation?
“The state simply has to create amendments to modify its existing rules then,” he says. “It is much better than having nothing in place.”
Perhaps Tamil Nadu can take a leaf out of Maharashtra’s book, especially in the aftermath of the monumental tragedy it has just experienced.