THE IMPACT OF RERA ON PAKISTANI REAL ESTATE

Like all sectors of society making it run smoothly, the real estate sector comes with its ups and downs too. Its faults often include lack of investment security, timely possession and unfair builders profiting off of their buyers innocence. To try to mend such problems and bring forth transparency in the real estate domain, the Real Estate Regulatory Authority’s development has been recommended by The Securities and Exchange Policy Board of the Securities and Exchange Commission of Pakistan (SECP) and Competition Commission of Pakistan (CCP).

WHAT IS THE HISTORY OF RERA?

RERA takes its origin from Dubai as a government agency to regulate the real estate sector in Dubai, the governmental Dubai Land Department. It's a head agency which serves as a foundation of the real estate sector in Dubai and was founded on 31 July, 2007 by His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai. It’s financially and administratively independent and has legal powers to oversee the real estate sector in Dubai. Its functions include the organization, scheming and evaluation of real estate projects and real estate related licenses as well.

In hopes of promotion of better consumer protection and investment into the real estate sector, the Real Estate (Regulation and Development) Act, 2016 was passed in India and was implemented in each state and union territory.

Moreover, he United States of America has 52 Real Estate Regulatory Authorities in all of their states.

WHAT DOES RERA STATE?

Real estate agents will be expected to register with the authority for the sale of their plots, houses or buildings. With the formation of RERA being recently approved by the Cabinet, Real Estate Regulation and the Development Act is expected to be implemented later through a presidential ordinance. With the Real Estate Regulation and Development Bill 2019 becoming finalized in hopes of fruitful management of the real estate sector, RERA will then be formed. From then, the affirmation from RERA will be necessary to begin any selling or purchase of a plot or even its public promotion or advertisement.

WHAT IS EXPECTED OF RERA?

• No project would also go through without a present full plan and the past projects of the developer.
• If there is any violation of the rules by the builder, RERA will have the power to revoke their license and the rights of the allotted and agents will be exercised accordingly.
• It will have quasi-judicial power in terms of solving land disputes.
• RERA will also have representation from the ministries of interior and finance, National Housing Authority, Naya Pakistan Housing Authority including an additional secretary-level officer from the ministry of law and justice. https://tribune.com.pk/story/2047889/1-govt-establish-real-estate-regulatory-body
• It will act as a consultant on development projects from the government. A central advisory council will be developed for the protection of consumer rights and investment promotion in the real estate sector.
• The matters within the purview of the authority or appellate tribunal will not remain fall under the ambit of civil courts. The authority will be headed by a chairman who will be appointed by the government. https://tribune.com.pk/story/2047889/1-govt-establish-real-estate-regulatory-body
• It will modernize laws relating to the transfer of property and protect the rights of both buyers and builders.
• The proposed authority shall have the same powers as are vested under the Code of Civil Procedure, 1908 for the resolution of land/property disputes
• A national level computerized database management system should be established which would be under control of RERA. It would comprise of all information regarding property such as the property owners’ details, exact location, info about the real estate agent affiliated with the property transaction, registrations, regulatory NOCs.
• It would promote better and technical education for brokers and agents through more training and endorsement of them. This would not only strengthen their professionalism but make investors and the general public even more inclined towards the real estate sector and their involvement in it. This will up the standards previously developed in the real estate industry and allow the public to have more confidence in them.
• It will act as a source of advice for the government regarding real estate matters.

Such are the activities RERA is expected to perform once it is set in presidential ordinance and legally implemented. To get more of a visual insight into the features of RERA, you can watch RedBox TV’s video regarding this as well.

More benefits of its registration can be seen below as well

RERA is expected to combat the problems pertaining to lack of standardization, unregulated professionalism and consumer protection. Due to the development of many local real estate regulatory authorities co existing together, various problems arise because of them overlapping against each other. Once the Real Estate Regulatory Authority is put into formation, it will act as one solid means of regulation of such bodies tending to real estate matters. It will make the registering of complaints against such bodies more convenient thereby monitoring their performance alongside. It will help avoid conflicts and loopholes that hinder the smooth performance of the real estate sector.

However, some individuals have doubted its upcoming development and the fact that it would live up to its expectations. They believe that it would be the same as other development authorities which are not working for the better good of the real estate sector. The Association of Builders and Developers of Pakistan, for example, did not approve of this venture. Their member, Arif Jeeva, believes that it will not reap the fruitful results it is expected to reap and instead prove to impact the real estate sector negatively. He further states, while representing ABAD that because there were no stakeholders were taken on board before making the decision for more in depth negotiation, RERA would not lead to positive results. The majority, however, looks forward to its establishment, hoping for a more transparent engagement between builders and buyers and more investment into the real estate sector.