Realtors in a double whammy
Shamsul Huq Zahid | Wednesday, 6 August 2008
Country's real estate developers, no doubt, are going through the most difficult time in their life.
On one hand, abnormal hike in the prices of construction materials has severely hit their business growth and, on the other, an ordinance seeking to 'protect the interests of the buyers of flats/apartments' has stirred panic among them.
The council of advisers at its regular weekly meeting held on July 29 last approved, in principle, the ordinance, titled, the Real Estate Management Ordinance, 2008, with the objective of streamlining the real estate business in backdrop of widespread allegation of fraud, delay in handing over of flats/apartments to the buyers concerned, violation of building codes etc.
The realtors, it appears, are now more concerned about the ordinance than their business since the penal provisions of the ordinance, which is awaiting promulgation by the President, they consider, too harsh.
The Real Estate and Housing Association of Bangladesh (REHAB) that represents all realtors of the country late last week requested the government not promulgate the ordinance, claiming that if enforced the ordinance would discourage investment and trigger a new crisis the housing sector.
The ordinance has a provision for imprisonment of various terms for the realtors if found guilty of fraud, deliberate delay in handing over flats/apartments to buyers in accordance with the terms and conditions of the agreements and violation of rules and regulations concerned.
The REHAB leaders threatened to halt work of all on-going and new projects if the government promulgates the ordinance without taking note of their grievances.
May be some of the penal provisions are really harsh. But a government worth its name cannot just watch the plight of the buyers of flats/ apartments, particularly when the delay in handing over of flats/ apartments or violation of building codes has been on the rise in recent years.
A report published in this daily recently said nearly 50 per cent of the flats/ apartments are not being handed over their owners in time. Sometimes, the buyers find the delay too long to bear with. Besides, allegations are galore about other fraudulent practices by a section of home builders.
The REHAB has also admitted that the number of complaints against their members over the delay has tripled in recent days. Such delays, at times, are made deliberately by a section of unscrupulous home-builders. However, one cannot just ignore the hike in the prices of construction materials, including mild steel (MS) rod, cement and bricks. It has become really difficult for many realtors to complete apartment buildings in line unless and until the buyers agree to partly bear the additional cost.
Many realtors have stopped work of their under-construction projects because of their failure to reach an agreement with buyers on the sharing of the additional cost. So, it would not be fair all the time to hold the realtors totally responsible for delay, particularly when the government has failed to bring the prices of construction materials at an affordable level.
The realtors have also raised another valid issue. They said no sector is totally immune from fraudulent practices. Then why should be the real estate sector singled out and treated differently?
Maybe, the government has found the stakes involved in the real estate sector higher than those of other sectors. In a way the government is right in its thinking about the sector. For, in many cases, an individual invests his or her life's savings for owning a flat or apartment. This is particularly true in the case of the buyers belonging to the middleclass. There are enough of instances in Dhaka city where buyers have not got the possession of their flats/ apartments even after eight to 10 years or the realtors concerned have flouted many provisions of the agreements struck with the buyers.
However, the government does need to take into consideration the importance of the construction sector that has been contributing at a rate between 8.0 and 9.0 per cent to the GDP. The sector recorded more than 8.0 per cent growth for over a decade, employing, directly or indirectly, nearly 3.0 million people.
The government, while trying to protect the interest of the buyers and ensure full compliance with the laws and rules concerning building construction, should also take into cognizance the problems facing the sector.
Thus, prior to the promulgation of the ordinance, the government should hold free and frank discussions with the REHAB leaders and try to accommodate their logical and justified demands, if there is any. It is the job of the government to punish the wrong-doers, no matter whoever he or she is, and, at the same time, offer the best of opportunities and support to those who are doing their business fairly.
On one hand, abnormal hike in the prices of construction materials has severely hit their business growth and, on the other, an ordinance seeking to 'protect the interests of the buyers of flats/apartments' has stirred panic among them.
The council of advisers at its regular weekly meeting held on July 29 last approved, in principle, the ordinance, titled, the Real Estate Management Ordinance, 2008, with the objective of streamlining the real estate business in backdrop of widespread allegation of fraud, delay in handing over of flats/apartments to the buyers concerned, violation of building codes etc.
The realtors, it appears, are now more concerned about the ordinance than their business since the penal provisions of the ordinance, which is awaiting promulgation by the President, they consider, too harsh.
The Real Estate and Housing Association of Bangladesh (REHAB) that represents all realtors of the country late last week requested the government not promulgate the ordinance, claiming that if enforced the ordinance would discourage investment and trigger a new crisis the housing sector.
The ordinance has a provision for imprisonment of various terms for the realtors if found guilty of fraud, deliberate delay in handing over flats/apartments to buyers in accordance with the terms and conditions of the agreements and violation of rules and regulations concerned.
The REHAB leaders threatened to halt work of all on-going and new projects if the government promulgates the ordinance without taking note of their grievances.
May be some of the penal provisions are really harsh. But a government worth its name cannot just watch the plight of the buyers of flats/ apartments, particularly when the delay in handing over of flats/ apartments or violation of building codes has been on the rise in recent years.
A report published in this daily recently said nearly 50 per cent of the flats/ apartments are not being handed over their owners in time. Sometimes, the buyers find the delay too long to bear with. Besides, allegations are galore about other fraudulent practices by a section of home builders.
The REHAB has also admitted that the number of complaints against their members over the delay has tripled in recent days. Such delays, at times, are made deliberately by a section of unscrupulous home-builders. However, one cannot just ignore the hike in the prices of construction materials, including mild steel (MS) rod, cement and bricks. It has become really difficult for many realtors to complete apartment buildings in line unless and until the buyers agree to partly bear the additional cost.
Many realtors have stopped work of their under-construction projects because of their failure to reach an agreement with buyers on the sharing of the additional cost. So, it would not be fair all the time to hold the realtors totally responsible for delay, particularly when the government has failed to bring the prices of construction materials at an affordable level.
The realtors have also raised another valid issue. They said no sector is totally immune from fraudulent practices. Then why should be the real estate sector singled out and treated differently?
Maybe, the government has found the stakes involved in the real estate sector higher than those of other sectors. In a way the government is right in its thinking about the sector. For, in many cases, an individual invests his or her life's savings for owning a flat or apartment. This is particularly true in the case of the buyers belonging to the middleclass. There are enough of instances in Dhaka city where buyers have not got the possession of their flats/ apartments even after eight to 10 years or the realtors concerned have flouted many provisions of the agreements struck with the buyers.
However, the government does need to take into consideration the importance of the construction sector that has been contributing at a rate between 8.0 and 9.0 per cent to the GDP. The sector recorded more than 8.0 per cent growth for over a decade, employing, directly or indirectly, nearly 3.0 million people.
The government, while trying to protect the interest of the buyers and ensure full compliance with the laws and rules concerning building construction, should also take into cognizance the problems facing the sector.
Thus, prior to the promulgation of the ordinance, the government should hold free and frank discussions with the REHAB leaders and try to accommodate their logical and justified demands, if there is any. It is the job of the government to punish the wrong-doers, no matter whoever he or she is, and, at the same time, offer the best of opportunities and support to those who are doing their business fairly.