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Calls for regulatory body for real estate industry in India

It is felt that as the property markets show sign of recovery and economic forecasts for 2009 are better than expected, then sales are likely to increase and therefore the number of problems.

'There is a need for an efficient and focused regulatory body to overlook the functioning of the real estate sector in order to insure the future development of the industry and safeguard consumer interests in line with international benchmarks,' said Assocham, the industry body.

A real estate regulator would ensure that the consumer grievances against developers, development authorities, real estate agents and financial institutions are addressed without any delay, it added.

The real estate industry is still some way behind other emerging property markets. A huge hole at present is the absence of full escrow account facilities to protect the buyer from unscrupulous developers. Assocham said is should be made mandatory to ensure transparency in real estate transactions.

The real estate industry maintains an escrow account for development of a project, purchase of real estate units and honouring property charges. This needs to be extended to cover the principles of honouring property charges, insurance liabilities and maintenance charges on a regular basis.

A spokesman said that changes are urgently needed as the real estate market starts to recover. It said that people are slowly purchasing, but only for personal use rather than for investment purposes. This means they are genuine buyers rather than speculators.

The growth is confirmed by the Confederation of Real Estate Developers Associations. 'In the last few months the real estate market has undergone major changes. The slowdown that migrated from the US has corrected in India now. Whatever pent up demand there was in the market has started converting into business,' said Santosh Rungta, CREDAI president.