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Lay of the land PDF Print E-mail
Monday, 26 September 2011 00:00
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While the last is yet to be heard on the cases filed against real estate major DLF in the Competition Commission of India (CCI) and the CCI’s R630-crore fine on the company, and many aggrieved buyers are planning similar action against their builders, the government is planning a more comprehensive solution. A real estate regulator, complete with its own appellate tribunal, is to be set up and the Bill for it is to be introduced in the winter session of Parliament, housing minister Kumari Selja has said.

In the DLF case, the CCI’s penalty is based on its understanding that DLF used its position of strength to get buyers to sign unequal agreements which gave DLF much more rights than the buyers had—these included unequal penalty clauses and also gave DLF the right to construct more floors without getting the explicit permission of the flat-owners. While DLF has said that it will challenge the judgment on grounds that the CCI has no jurisdiction and that it is not a dominant player (so there’s no abuse of dominance), none of these are issues that will apply in the case of a real estate regulator. Flat owners can simply petition the regulator on all the issues they’ve raised before the CCI and hope to get a quick ruling—while the real estate regulator’s remit will include everything to do with the real estate sector, in the case of the CCI, there is no remit if DLF is able to convince the appellate court that it is not a dominant player.

Nor is this the only aspect that needs to be taken care of. One of the charges made by the flat-owners’ associations is that DLF has built far more than what is legally allowed—DLF denies this. Since this does not come under the CCI’s jurisdiction, the ruling does not deal with this. With a real estate regulator, however, all such issues can be, and will be, brought up. Other aspects that a real estate regulator will help put in place norms for include, for instance, how much of a flat can be construed to be super built-up; what are the norms for taking payments and how should this be linked to the construction schedule; what are the norms on advertisements or on handing over the common areas to resident welfare associations. Hopefully, the Bill won’t get scuttled in the political impasse that has gripped the nation for so many months now.

 

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