Real estate business do not go without corruption. Right from Khatha Extract to Registration to Plan Approval, every stage has corruption. Builders, Contractors, Real Estate Agents everyone is ready to shell out anything to acquire property either legally or illegaly. Enroachment of Government or Private Property is common and cannot be controlled due to corruption. Local corporations like our BBMP and Mysore's MCC and Development authority like Bangalore's BDA and Mysore's MUDA , Registration offices play a prominent role in this corruption. There is so much greed for land in our Country due to the high appreciation rates which is controlled by Real Estate Agents. People do not hesitate to invest in realestate, so in the bribery act on the way.
I am opening this thread just to discuss/brainstorm on how this realestate related corruptions can be currbed or eliminated.
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One part!
One part of the problem is the the corruption is the rampant bribery during registration - percieved as a small fee to get over their under-valuation of property.
What is needed to address this is to
a. Increase the guidance value closer to the market value. Todays market values are about twice the guidance value for registration.
b. Reduce the registration charges from the present 7.5% to about 2%. With that, the 'incentive' to register a sale at a lower valuaion is lost.
c. Change the banking regulations governing the property loans. Banks today give a loan for about 80-90% of the transaction value. But, the property gets registered for just about 50% of the deal value. If the bank loans are to given on basis of the registration value only, there will be a huge push for people to register at fll value.
d. Introduce online registration. This mechanism - to disconnect an official from the aam aadmi while he gets his service - just goes along with the other reforms - like income tax etc.
-Srivatsava V
Online Source of Ownership / Khatha Extract
One of the major problem while purchasing the site is to get the khatha extract from BBMP. For this again there is bribery. Based on PID Number, one should be able to see the Khatha directly on the internet. Can BBMP do this?
BMRCL and Khatha bungles
The over ambitious project of BMRCL-Mantri combine to build a Mall-metro station has hit speed breakers because of exposed khatha issues..
http://www.deccanherald.com/content/188057/builder-took-metro-ride-report.html
only an RTI could get this data out..thanks Annaji!
Big Builders are the prime source of corruption in Real Estate
Big builders like Mantri, Brigade, Prestige etc.. are the prime source of corruption in Real Estate business.Its like if you are buying from them, you are indirectly paying for corruption although you don't want to be corrupt and you think so by buying through these big builders posh gated communities which looks legally correct in every angle.
Some concerns
Vasanth
Thanks for starting a thread on this important/sensitive issue. There is a saying “Yatha Raja, Thatha Praja”. I am talking about ordinary janata. You need to include our netas also who acquire real estate legally (G category) or illegaly (through graft or taking land from farmers using muscle power).
Srivatsava,
Good suggestions, but here are some concerns.
Increasing the guidance value – The guidance value is always less. Increasing the guidance value closer to the market value could create chaos in the RE market. It’s like it everywhere unless one is in USA where in some areas the market value is less than what owners owe to the banks as mortgages.
Change the banking regulations – This is doable. The bank loan should be linked with the registration process. That means the sub registrar’s office should demand to see the bank loan papers, both from the bank and the owner / builder and compare them. That way the sub registrar’s office will know how much money was paid by the bank. But again the govt. will go with the guidance value, not the market value.
Reducing the registration charges – Good idea, but how it will it reduce bribe at the time of registration?
Online registration – Though it looks the right thing, one will have to check or authenticate the documents so that there are no fake papers (not that anyone in the sub registrar’s office checks the papers for their authenticity).
Fixed Registration Prices
Registration Prices are bases on Guidance Values and hence Guidance value is not reflecting market value. What if we have Fixed Registration Prices? There will be no corruption in Registration office to reduce the registration prices. Guidance value will have an unbiased figure.
Registration should become 2 Phase Phenomenon.
In the first phase, Agreement to be done in registration office and the 'quote' should be produced by Registrar office. This 'quote' should be used by Banks to approve loans. Quote should be sent to Bank online without any data entry between.
In the second phase, actual registration should take place with fixed prices. There should be SLA for completion of a registration. If not completly online, application can be processed online. Normal registration should take place within 'n' working days after applying. If not finished, the officer incharge has to bear the registration charges out of his salary :).
There could be Tatkal scheme where in which registration can be done within 3 days or so.
State Government will never outsource these kind of jobs to Private BPOs saying 'security, blah blah' like the Central Government has outsourced Passport to TCS BPO. If this could be outsourced, process will be more streamlined. If this is outsourced, SLAs can be applied to the BPO operator.
Upon Registration - New owner should be marked on Map.
Upon Registration, the new owner name, his UID (upon finalizing this Project) or atleast PAN No / Driver's License No / Voter ID No Details should be linked to the Site on GIS map of the area of judistriction. Map should have clear markings. This will easily clear the enroachments.
Upon division of a property, then it should go through a new process.
This Database should be audited and should be maintained outside India or atleast outside Karnataka by a third party. Auditing should be checked by another firm such as E&Y.
I have heard that even Bhoomi's database which is kept in Taluk offices are manipulated by the local system admins.
professionalism - the need of the hour
If this could be outsourced, process will be more streamlined, and SLAs can be applied to the BPO operator.
Yes, that's indeed what needs to be done, by engaging professional outfits (not the likes of this). And, the same applies to all government departments. The gains will be huge and in many ways, for a marginally higher cost.
Anna effect?
Perhaps an Anna effect - the Inspector General of Stamps and Registration, the department that had the dubious distinction of being listed as most corrupt by the "I paid a bribe" site, has as of 25th August, gone on to publish its "Citizen charter" - check this.
Would like to believe that things are happening, finally!