Dawn of RERA - a step in the right direction.

Byline: Ahsan Nisar

Pakistan is a country with limitless growth opportunity in almost all sectors, construction being one of them. The government is providing subsidy to sectors that have high positive cyclical effects. However, malpractices in the real estate sector prevent it from flourishing beyond a point that was reached decades ago. In other words, things are stagnant. For quite some time, the image of the industry is tarnished by fraudulent realtors and malpractices.

People engaged in the real estate sector perceive investors as cash cows. Instead of executing a good deal that will attract potential investors, the agents wish to make maximum commission through a single deal. There is no transparency, i.e. incomplete disclosure of information on financial transactions. Pakistan ranked 75th on the Global Real Estate Transparency Index, which was an upward jump of about 15 places. However, there is still a vast area that requires improvement and development.

Pakistan gets a sizable portion of its Gross Domestic Product (GDP) and economic activity from this sector, hence, revamping it will do wonders. Realizing this, the Government of Pakistan established Real Estate Regulation and Development Bill last year. Under this, the 'Real Estate Regulation Authority' (RERA) was formed. As a result of this, Pakistan improved on the Global Real Estate Transparency Index as stated earlier.

Last month, the National Assembly (NA) approved the Islamabad Real Estate Bill 2020. The objective of this bill was to regulate real estate under RERA. As a starting point, the authority is to form appellate tribunal courts that will solve ongoing disputes in the concerned sector. Since large groups of people and families are involved in Pakistan, real estate and property disputes have tendencies to stretch over years and at times over decades. Increasing transparency will boost confidence of the investor who is hesitant to risk his/her funds.

Real Estate Regulatory Authority (RERA)

Under RERA, all real estate dealing will be transparent. It will be mandatory for agents operating in the field to be registered with concerned authorities. This registration may commensurate to a quality attestation/affiliation with an official body so the investor can feel safe with their money as agents will have to pass their deals through authorities in selling houses, plots or buildings.

Stakeholders here are not only confined to individual customers but also encompasses Small...