Resolution of lingering land disputes: CCP asks govt to form real estate regulatory body

ISLAMABAD: In the wake of increasing frauds in real estate sector, the Competition Commission of Pakistan (CCP) has asked to the government for establishment of real estate regulatory authority with quasi-judicial powers to resolve lingering land disputes.

It also recommends to the government for bringing amendments into existing legal framework with the approval of Parliament and provincial assemblies at respective levels. Moreover, it also proposes regulator with the function of registering the real estate agent with the penal consequences in case of non-registration.

According to report titled “Issues in Real Estate Sectors of Pakistan” prepared by the CCP for submission before the government, a copy of which is exclusively available with The News states that the practices observed in international jurisdictions such as Dubai, India, UK and USA suggest the establishment of a real estate regulatory authority in Pakistan which would play a critical role in adding value to the development of the real estate sector and help the national economy.

The real estate sector in Pakistan suffers from the issues of transparency, lack of mutual confidence and the protection of consumers’ confidence. In addition, to enact and support the functions of real estate regulatory authority, a law of the Parliament must be passed envisaging the empowering provisions of the real estate regulatory authority as well as to support its functions.

Establishment of a real estate regulatory authority: To act as a real estate regulatory body to coordinate and advice all efforts of the government, regarding the development of real estate sector. The relevant authority should have the following functions and powers:

Registration and regulation: the authority should be empowered to monitor Pre-registration/licensing, renewal of license of developers, promoters, project managers, real estate agents/brokers/dealers. Defining and issue eligibility criteria and qualification for market professionals and intermediaries and code of conduct; Standard setting body and issuance of uniform standards, code of practice, regulations for smooth and transparent conduct of real estate sector; Issuing of advertisements and regulation of deposit/trust money.

Powers and enforcement actions: Real estate sector specific consumer complaint handling system, inspections, enquiries, investigations and subsequent enforcement actions including, penalties and restrictions.

Powers of a quasi-judicial body: The authority shall have the same powers as are vested under the Code of Civil Procedure, 1908. In order to make the process of resolution of land/property disputes and to facilitate the above mentioned functions, it is imperative that it is also given the powers of acting as a quasi-judicial process.

The CCP also recommends training and certification of brokers and agents and establishment of national level computerised database to be developed which should contain all information regarding a property including; exact location comprised upon khasra, aks-e-shajra, etc., details, details of owners of the property like fard-e-malkiat, etc.

Details of the real estate agent who was involved in facilitation of the transaction, who should also be held responsible in case of a dispute. Publish and maintain a website/database of all records of real estate sector, with an updated status on registration, title, regulatory NOC, etc. Conversion of conventional land record system on modern day’s information technology based systems.

Reviewing the Existing Laws and Appropriate Amendments: The lack of uniformity in the Real Estate Sector regarding the applicable laws is a serious issue for the consumers. Further, there is an inherent conflict in the laws governing the development authorities with special reference to competition issues as the regulators i.e. LDA, CDA, FDA, GDA etc., are not only performing the functions of the regulators but are also undertaking economic activities by launching their own housing schemes. The regulators i.e. the respective development authority, becomes the competitor of its own regulatees.

In addition to the foregoing, the complaint resolution mechanism is also discriminatory in a way that a complaint against the housing scheme or project launched by the development authority is to be processed and forwarded by the development authority against whom the complaint is launched.

Furthermore, the laws with reference to the registration of the real estate agents are too outdated and contain minimal penalty. A complaint against the non-compliant real estate agent can only be filed by the registering authority and no remedy is available to the consumers.

This makes the applicable laws purposeless and ineffective. Hence, the laws vis-à-vis the registration of real estate agents and the complaint resolution mechanism and penalties must be revised. Similarly, the laws regarding the land acquisition and transfer of property i.e. the Land Acquisition Act, 1894 and Transfer of Property Act, 1882, are outdated laws, which were aimed at enforcing the British Rule in pre-independence era. The laws must be revised owing to the changed market conditions and evolution of rights of the consumers, in particular, keeping in view the fundamental rights guaranteed under Article 23 & 24 of the Constitution read with Article 38 thereof.

Another issue raised during the public hearing was the inordinate delay in resolution of disputes regarding the real estate sector. It takes years and years for any land dispute to resolve. Although, through the National Judicial Policy certain recommendations were made for the expeditious disposal of the cases. However, to-date it remained ineffective and has increased the agony of the consumers. Hence, it is important that appropriate amendments be made in the respective laws to provide for expeditious disposal of cases in the real estate sector treating it as a special subject, preferably a time limit of six months to one year be prescribed for expeditious disposal of cases, be it by the special tribunals/courts or by the court of ordinary jurisdiction.

In this backdrop, it may be observed that the entire sector comprises of various transactions which include acquisition of land, its development and conversion of the properties into commercial buildings. Furthermore, to provide utilities and to develop relevant infrastructure particularly in remote areas is a challenging job.

In Pakistan, development of the real estate and providing houses to general public is divided among federal and provincial governments. Although certain regulatory authorities have been established at federal and divisional level of provinces, yet in the absence of a focused national policy and lack of regulatory frame work, there is a mushroom growth of various projects which are being launched at massive level in almost every town and city of the country.

However, the existing legal framework has failed to maintain a vigilant and a system of proper check and balance in this sector, which results in the general public as well as commercial investors losing their hard earned money at the hands of felons and other factors, causing instability in the sector and further disrupting the ease of doing business, it concluded.