Lies and Secrecy have become USPs of Real Estate industry

Since last many years there was a Builders Vs Buyers scenario in Indian Real Estate Industry and it seem that this scenario is going to remain there in future also . Because lies and secrecy have become unique selling Propositions (USP) of this industry .Government authorities also keep mum on buyers issues. Why don’t concerned authorities provide  necessary information to buyers ?, why builders don’t put real facts before them, why they hide vital information from buyers?

Since my last posts Pune - hub of illegal Real estate activities,More than 150 projects violated Environment clearance norms  and what is the future of the projects that have violated environment norms ? I received many phone calls and emails. All the calls and mails mostly were revolving around only environment clearance (EC) problems. For readers’ perusal reproducing four excerpts from those emails and my comments here.

Problem 1 - The Projects to whom State Level Expert Appraisal Committee (SEAC) has recommended  Government of Maharashtra to take action for violation of Environment (Protection) Act, 1986 .Can you guide me to find what were the issue in the case and if the case open against the builder or has been cleared or not

My comment– in my post  what is the future of the projects that have violated environment norms ? I have made it clear. And best option is to ask this question to the builder because after legal action and clearing objection taken by SEAC he may get EC. Hence it is their responsibility to disclose the information about what action has been taken on the builder, has the builder cleared all the objections and whether EC has been given to him or not.

Problem 2-  After going through your blog I asked builder about EC.He said that he has applied for EC  & will get the clearance within 115 days.He said that he is not going to start building construction till he get clearance. Now he is asking me to do agreement by demanding 20% amount of flat cost. In this case I am not sure to go for agreement with builder or not. What I should do in this case? Can you please help me in the given situation? I have draft copy of agreement sent by builder, can share it if you allow for it. Can I get your appointment for consultation?

My comment – Builders seems to be law abiding but then why he is asking money in advance. Because environment clearance (EC) should be there prior to starting construction? And what if he doesn’t get it? . Is there any clause mentioned in agreement regarding that aspect?. What will happen if he doesn’t get EC. ( he may be sure about it because of something else).To me it is crime to sell, make agreement or demand money before obtaining all the necessary permissions.

Email 3 -. As a RTI activitist you surely or might have the contact or  email id of  the group where we can Seek information whether any particular project go to clearance or not.I have already gone through the Maha site link but couldn't find my builder project so just want to re-assure whether my builder got environment certificate or not. Request to share the contact number or email id of the point of contact or SPOC who is responsible to provide environment certificate  for residential project going on Pune.

My comment – unfortunately there is no such forum where property buyers can get all the relevant and authentic information.

Unfortunately all these mails talk of only environment clearances and nothing else, as if that is the only thing about which builder has lied and everything else is right. I wonder how do people believe in the builder whose USP ( Unique selling point) is “ telling lies”. Environment clearance is one thing that has come to light but there are many more things that are to be taken care before buying flats.

But big question is why public authorities don’t put information related to real estate projects in public domain?. Reason is simple. Most of the bureaucrats and politicians directly or indirectly get benefits from such projects.

In last many years in India housing for poor or affordable housing has become a serious issue. Many Governments brought many legislation or schemes to promote such housing. Be it urban land ceiling Act ( Funny thing is this act was brought so that poor people should get house and it was repealed for the same reason) , Housing for economically weaker section ( EWS ) , Housing for dis housed (HDH), special Township schemes etc. etc.

Many concessions benefits were given  to promote such schemes. The Idea was to make available affordable housing for poor. But that didn’t happen because builder with help of politicians and bureaucrats siphoned off all these concessions and benefits in between. They didn’t reach to whom those were meant for i.e real, poor and needy flat buyer.

For example for special townships builder gets following concessions

i) automatic Non-agriculture permission.

ii) Exemption from Urban Land (Ceiling and Regulation) Act, 1976.

iii) Government land falling under township area leased out to the developer at the current market rate.

iv) The condition that only agriculturist will be eligible to buy agriculture land is not applicable in Special Township Areas.

v) Nno ceiling limit for holding agriculture land to be purchased by the owner/developer for such project.

vi) Floating FSI in the township. Unused FSI of one plot can be used anywhere in the whole township.

vii) The stamp duty rates applicable in the Special Township area are  50% of prevailing rates.

viii) A Special Township Projects are  partially exempted from payment of scrutiny fee for processing the development proposal.

ix) 50% concession in payment of development charge.

x) Development of basic infrastructure and amenities.

However there are some conditions also like

(a) Water supply. The developer is required to develop a source for drinking water (excluding ground water source) or get a firm commitment from any water supply authority to meet the daily requirement of 140 litre per person a day. This excludes water required for fire-fighting and gardening. The storage capacity provided should be 1.5 times more than the requirement.

(b) Drainage and garbage disposal. Environment-friendly disposal of sewage and solid waste management as per the norms of the state pollution control board.

(c) The developer has to ensure continuous and good quality power supply through captive power generation, or draw from the existing supply system.

(d) The developer must get prior environment clearance certificate from the Union Ministry of Environment and Forests (MoEF).

(e) Twenty per cent of the area is to be reserved for park/gardens/playgrounds.

(f) Eco-friendly amenities like solar water heating.

(g) 60% of the area to be purely residential and out of the total floor area proposed to be utilized for residential development, 20% of the same to be used for residential tenements of 40 sq m.

(h) Proper road area with the main road being 24 meters wide. etc etc

But what happens in reality.  Builders get all the benefits in advance, however when it comes to fulfilment of conditions. Both the builders and authorities keep mum. Whenever builders face some difficulty bureaucrats and politicians come to their rescue. Whenever builder finds any difficulty in getting commencement certificate they introduce a term called “conditional permission“which is totally illegal. Yes there two types of conditions some have to comply before work starts and others have to comply while work in progress.

For first type of conditions there is no excuse. Even then builders start construction and even before that they start selling the flats. But when it comes to the compliance of earlier or latter conditions authorities cry of having no authority to act on non- compliance or violations. When it comes to oblige builders , authorities read too much between the lines but when it comes to held builder responsible for some thing, they don’t even read what has been written in black and white?

For example

1)Central government by a notification on 28 February 2014 conferred state units powers to issue show cause notice to project proponents in case of violation of the conditions of the environment clearances issued by the said Authorities to projects or activities within their jurisdiction and to issue directions to the said project proponents for keeping such environment clearances in abeyance or withdrawing them, if required, for violations. But has any body heard or seen on their website of state units that have kept someone’s EC in abeyance or revoked it ?

2) i) It is  mandatory for the project management to submit half-yearly compliance reports

in respect of the stipulated prior environmental clearance terms and conditions in hard and soft copies to the regulatory authority concerned, on 1st June and 1st December of each calendar year.

(ii) All such compliance reports submitted by the project management are public

documents. Copies of the same shall be given to any person on application to the concerned

regulatory authority. The latest such compliance report shall also be displayed on the web site of the concerned regulatory authority.

Have you seen any of these documents on environment department’s website?

As per environ protection act and as per section 4 of Right to Information act all the documents pertaining to various permissions, compliances, authorizations , action taken reports and  plans must be in public domain. But what is the reality? . If you go to environment department’s portal, they have uploaded some information but that is insufficient and not in searchable mode, hence people can’t obtain any information they want. If you go to pune collector’s website it also doesn’t help. If you go to pune municipal corporations website, yes they have made available facility to obtain information on commencement certificates given and plans sanctioned thereon but it doesn’t work. Do you all this is just a coincidence? , certainly not.

Now what is the option for the flat buyers?. They must do some homework; consult some legal expert or  sensible people before investing their money.

Related Stories

Pune - hub of illegal Real estate activities,More than 150 projects violated Environment clearance

What is the future of the projects that have violated environment norms ?

Will real estate bill really stop unfair practices in housing projects ?

Charge sheets against illegal plot buyers will stop disastrous incidences like katraj tragedy –

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Open Letter to Rahul Gandhi

Dear Shri Rahuljee Gandhi,

You have announced that the Congress party is serious about fighting against corruption in India. The Congress party has brought several legislations and is in favor of bringing more legislation to fight corruption. I humbly bring to your notice that bringing good legislations alone does not help in fighting against corruption. Implementation of legislation is the key to fight corruption.

The Congress party takes credit for enacting the “Right to Information Act” (RTI). However what about its implementation? In Maharashtra, RTI is in a critical condition. Since last many years, more than half the posts of information commissioners are vacant because the Chief Minister has no time. Hence pendency of second appeals has piled up to 26000. People do not want to file RTI applications because they don’t get the information.

Official reports that 95 % RTI applicants get the desired information are cooked up because the scenario at ground level is exactly the opposite i.e. 95 % applicants do not get the information. There is no transparency in appointment of information commissioners. They are chosen arbitrarily.  The decisions of some information commissioners are so bad that the citizens wonder the information commissioners are appointed to implement the RTI properly or to kill it? The scenario all over India is no different.

Take another example of Maharashtra Prevention of Delay in Discharge of official Duties Act 2005. The act came into force in 2006.  However the rules were issued in this December 2013 i.e. seven years later! More to say, clause 8 in these rules says e-mails shall be acknowledged and the e-mails shall be forwarded to the concerned office or Department or Desk if they do not pertain to the addressee. The applicant is to be intimated accordingly by e-mail. However my e-mails to the chief minister and chief secretary of Maharashtra on their official e-mail IDs bounced! Now you imagine what will be the scenario while implementing this legislation.

State Governments all over India keep issuing numerous circulars. They are the same everywhere. Never implemented. It becomes a case of “you tell me the person and I shall tell you the circular”, thus putting into action only those circulars, which benefit the officers or their cronies. Others are thrown in the waste paper basket and none feels bad or sad about it. The circulars are cleverly drafted. If some issue is to be evaded, then the choice of words is so 'creative' as to abash even a litterateur. Perhaps these circulars would pass off as pieces of excellent literary talent.

Here’s how. Consider another the case of Maharashtra. Many circulars were issued from Mantralaya of Maharashtra since 1996 to express commitment to eradicate corruption and illegalities. So far, 11 circulars have been issued for action against those involved in corruption and illegalities. These circulars are well drafted comparable with the masterpieces in literary art! But there has been no action as a result of a single circular. If you query officers about any problem, they immediately draw attention to these thirteen circulars and boast about their commitment to eradicate corruption and illegalities.

Shakuntala Bhagat the first beneficiary in Maharashtra, who received health card for Rajiv Gandhi Jeevandayee Arogya Yojana from Smt. Sonia Gandhi, appeared to be a fake. I found major discrepancies in Pune Municipal Corporation (PMC) Urban Poor health scheme and Contributory Health scheme. The Health Minister ordered an inquiry in this case after I reported the matter. However, when the inquiry team went to PMC, it was sent back because the orders for the inquiry came from the Health Minister and not from the Urban Development Department. The Urban development department is with Chief Minister and till today there is no order from the CM in this regard.

In nutshell, while bringing good legislation to fight against corruption succeeds only in fooling the public for some time, proper implementation alone will reveal your real intentions.

Why political parties did change their stand on RTI and Transparency?

After central information commissions (CIC) decision on Right to Information (RTI), regarding applicability of it to political parties all the parties' unanimously opposed the decision.Interestingle parties' earlier singing song of transparency and accountability suddenly changed their tune. Many of them were scared of disclosure of names of donors. Actually though direct or indirect funding was important factor in bringing political parties under ambit of RTI. To me major role is played in this decision by preamble of constitution of India and preamble of RTI.

Para 86 of this decision says "We may also add that the preamble to the Constitution of India aims at securing to all its citizens: JUSTICE, social, economic and political; LIBERTY of thought, expression, belief, faith and worship; and, EQUALITY of status and of opportunity. Coincidentally, the preamble of RTI Act also aims to promote these principles in the form of transparency and accountability in the working of the every public authority. It also aims to create an ‘informed citizenry’, to contain corruption, and to hold government and their instrumentalities accountable to the governed. Political Parties are important political institutions and can play a critical role in heralding transparency in public life. Political Parties continuously perform public functions which define parameters of governance and socio-economic development in the country." moreover, it was also said that the Political Parties are the building blocks of a constitutional democracy.

It seems that political parties were confused while dealing with this case. I guess there was very much importance to argument on confidentiality, transparency, and public interest in this case .It was difficult for political parties to openly defend confidentiality, and with this obligation, they were helpless and unable to oppose transparency and public interest. In addition, Nationalist Congress Party (NCP) and Communist Party of India (CPI) had almost replied to application under section 6 of RTI.

Chandan Bose, PRO, Nationalist Congress Party, in his letter dated 27th November 2010, had informed the complainant “It is very important to mention here that NCP is a non-government organization. Hence, we do not have much more resources nor surplus staff to expedite unusual work, However, I would like to inform you that ours is a National Party duly recognized by Election Commission of India and that from the day of inception of our party, we have been regularly filing our returns to the Income Tax authorities and also to the Election Commission of India along with whatever voluntary contributions received. It is pertinent to mention here that our all obligation towards authorities are up to date. If you feel like, you may collect all the information you desired, from the above said authorities." In other words NCP had agreed that even though it is non - governed organisation it is covered under section 2 (h) (d) (ii) of RTI.

CPI had earlier replied and provided names of top 10 donors to applicant and On the other hand,  A.B. Bardhan, General Secretary, CPI, in letter dated 21.3.2011addressed to applicant  Anil Bairwal has stated that CPI is a Public Authority under section 2(h) of the RTI Act. The relevant portion of his letter is extracted below :- “(a) Yes, we are Public Authority under section 2(h)(d)(ii) “non-government organizations” substantially financed, directly or indirectly, by funds provided by the appropriate Government. In addition (b), we have our internal Appellate Authority “Central Control Commission.”

Later on all the parties including NCP and CPI changed their stand in CIC. Why this happened?. why political parties are scared of disclosing their funding? As per Transparency International, Money may come into conflict with the democratic principles of civic equality and fair competition in elections and can undermine political representation.

For example

1) When the availability of resources becomes a decisive factor in winning elections instead of candidate proposals.

2)When money contributed to electoral campaigns safeguards private interests and inhibits political parties and candidates representing collective interests to communicate their ideas.

3) When a party in office uses the system and the resources of the State for the benefit of the electoral campaigns of its candidates.

4) When companies contribute to electoral campaigns in exchange for future favours from elected representatives.

5)When illegal groups, such as organized crime, drug-trafficking or other armed groups, support candidates who in performing their duties will represent illegal interests.

6) When resources used to fund electoral campaigns are raised individually by candidates and not by their parties, thereby creating the risk of personal commitment on the part of the candidate to the donor.

7) When candidates use financial resources for inappropriate purposes, such as vote purchasing or other forms of unfair competition.

8) When elected representatives have, in general, a greater commitment to donors than to the public.

9) When representatives use their post and attendant government resources to gain re-election.

10) When civic equality, reflected in the principle of each individual having one vote, is undermined by the unwarranted ability of some to contribute money to politics.

These conflicts affect the legitimacy of elected representatives as well as their ability to develop rules aimed to benefit the public. The negative impact of such on the quality of life of the people multiplies and the democratic system as a whole stands to lose credibility.

Shining a light on political financing is the best way to clean house. When parties and candidates disclose information about funds used to finance their activities, both during electoral campaigns and generally, scrutiny of illegal funds and influence peddling in politics is facilitated.

All politicians as well as the parties and groups that support them are either legally or morally required to report to the public. The accuracy and usefulness of reports will increase to the extent that they are fully disclosed to the public and to the media. Reports should be clear, complete, presented on time and reliable.

However, this is not happening in India only. Since last few years, many countries worldwide are trying bring legislation on political funding and expenditure. Many developed countries already have such legislations and control over funding and expenses of political parties and they make them public.

Government can be pro - people - Andhra Pradesh experience

 Participants of a recent convention in Hyderabad of Right to Information (RTI) activists were amazed by the pro – people attitude of government servants of Andhra Pradesh. Normally, government officers are seen to prefer to stay away from RTI and activists working for it. In the state of Maharashtra almost all officers seem to believe that they belong to the government so need not attend events related to RTI as they are not related to it. On the contrary officers in Andhra Pradesh seemed to be of a view that it was their responsibility to implement the RTI and they should communicate with social activists to remove errors in the implementation. And they just don't have that policy but also they are seen to implement it.

 It does not mean that all is well in Andhra Pradesh. It also does not mean that there is total eradication of corruption. It also does not mean there are no complaints of officers about misuse of RTI. There are some complaints but officers do not make an issue of it. There is more emphasis on grievance redressal of RTI applicants. So, they do not seem to have given overwhelming importance to minor issues like word limit in RTI application or only one subject in one application. A committee has been formed under chairmanship of the state chief secretary to ensure proper implementation of RTI and to solve problems related to it. Interestingly, two NGOs have been included in the committee as members. A cell has been formed to ensure maximum use of RTI so that good governance and transparency would be encouraged as well as accountability would be fixed. The cell has been entrusted with communicating with NGOs, media, other institutes and personalities regarding RTI. It appears that there is better implementation of good governance and proactive disclosure of information by the government.

A national convention was organized in Hyderabad by National Campaign for People's Right to Information (NCPRI) in the campus of Andhra Pradesh Academy of Rural Development (APARD). Although the convention was organized by NCPRI, officers of Andhra Pradesh were proactively helping in its organization as if they were the hosts. APARD is an institute where training about rural development is imparted. The institute imparts training to 2.6 lakh people's representatives and about fifty thousand government officers so that there rural poor would benefit from government schemes.

 The convention of activists was attended by former central chief information commissioner (CIC) Wajahat Habibullah, former chief election commissioner James Lingdoh, former chief state information commissioner of Andhra Pradesh Jannat Hussain, rural development minister of AP D. M. Varaprasad Rao, additional chief secretary of union rural development ministry S. M. Vijayanand, principal secretary of rural development department of AP Reddy Subramaniam and APARD commissioner K Chandramauli. Directors of social audit departments of Madhya Pradesh, Uttar Pradesh, Gujarat, Karnataka and Orissa were present for the convention. It was also attended by social audit tribunals of Manipur, Kerala and Gujarat. About 300 activists from 19 states were present for the convention.

 Activists were pleasantly surprised by the pro – people approach of government officers of Andhra Pradesh. But they were more impressed by the practice of doing social audit of government works. Social audit means audit of government schemes or projects done by beneficiaries or those concerned regarding quality of work, its utility, expenditure and accountability. Andhra Pradesh is the only state in the country which has a special law for social audit of government schemes. The Act is called 'Andhra Pradesh Promotion of Social Audit and Prevention of Corrupt Practices' and it is in effect since 2011. There is a provision of imprisonment up to two years of the guilty for lacuna in the work. It is noteworthy that social audit report is read publicly in presence of all concerned and the accused are given an opportunity to present their case.

 Social audit does not mean only a fault finding mechanism. Thanks to it common man gets directly associated with government work and the belief in the democracy is deepened. It helps in empowerment of common man and ensures transparency in the work. As the social audit reports are read in village meetings, all records, ground reality and utility of work are reviewed threadbare. So, there is no scope for mistakes. After the law was implemented in Andhra Pradesh, misappropriation of Rs. 99.87 crore in implementation of various works under Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) was exposed. Out of that amount of Rs. 21.76 crore was recovered. Irregularity in work of 16688 employees was found. On the basis of social audit report, 3111 employees were removed from service, 561 employees were suspended, 229 FIRs were filed and divisional inquiry was launched against 1557 employees. This statistics is impressive.

 Although all these developments took place due to social pressure, one should not ignore positive attitude of rulers and government officers. It is widely believed that rulers and officers of Indian Administrative Services are the same everywhere, but then how come they are public oriented only in Andhra Pradesh and why it is not the case anywhere else? Attending this convention or such other conventions can not be a criterion of being pro people. But it helps to know what is happening elsewhere and where are we lacking. One can make improvements accordingly. In that respect, Maharashtra officers were conspicuous by their absence. Can't help, it is a matter of attitude.