India Imposes New Rules on Property Developers

The Confederation of Real Estate Developers Associations of India (CREDAI) is imposing a new code of conduct on real estate developers in the hopes of instilling more transparency …

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The Confederation of Real Estate Developers Associations of India (CREDAI) is imposing a new code of conduct on real estate developers in the hopes of instilling more transparency and accountability in the market. Experts at CREDAI say middle-class consumers are complaining that developers are taking advantage of them by demanding additional feels upon move-in, delaying taking possession of properties and failing to meet basic development standards. The agency is requiring its 8,000 members voluntarily sign the agreement as part of the self-governing system. The agency reported success in a pilot program after which the new code of conduct is modeled and has invested in advertising to spread awareness to consumers of their new rights. For more on this continue reading the following article from Property Wire.

A new code of conduct has been agreed by the Confederation of Real Estate Developers Associations of India (CREDAI) with the aim of resolving complaints about the house buying process.

The most common complaints are a delay in taking possession of a property, failure to meet commitments, additional money being demanded above the agreed price and ambiguities over sold areas.

‘The primary concern of the consumer is transparency and accountability. Many middle class customers carry the perception that the developers are not answerable and that the only recourse is litigation which is a long drawn and messy process,’ said Pankaj Bajaj, president of CREDAI for the National Capital Region.

CREDAI has over 8,000 members and it requires them to sign a Code of Conduct which is a self governing mechanism requiring them to adhere with prescribed levels of transparency with their customers.

Apart from committing to being transparent with the customers on area calculations, approvals status and specifications, the Code of Conduct requires the developer to declare what compensation will be paid if there are delays delivering a project.

According to Bajaj the aim is to differentiate good developers and fly by night operators in a sector which has been maligned for its opaqueness.

CREDAI has also launched a Consumer Grievance Redressal Forum where any member of the buying public can lodge a complaint against a CREDAI member.
 
‘We realized that self governance and peer pressure are powerful tools. We have been running a pilot project of this exercise and found that 90% of the complaints against developers got resolved due to the peer pressure from the CREDAI forum on the concerned developer,’ explained Bajaj.

The Forum has a panel of experienced developers and legal experts who decide on the complaint. Complaints can be lodged on the CREDAI website. There is also an advertising campaign to increase awareness of the code.

‘Hopefully, this programme will succeed in aligning the faith of the consumers with the intent of fair and transparent developers. We also hope that as a result of this, the market is going to start discounting non transparent developers where there is no redress forum for complaints,’ added Bajaj.

This article was republished with permission from Property Wire.

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