Streamlining real estate business

Dhaka,  Wed,  20 September 2017
Published : 12 Aug 2017, 19:13:55
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Streamlining real estate business

Tasmiah Nuhiya Ahmed
Shelter is a fundamental human right, vital to life, dignity and development of individuals and hence of the family, the society, the country and humankind at large. It is often said that it is more than a roof over one's head. It provides security, an identity, a place to come back to, a place to call home and a place for family life. Article 15 of the Bangladesh Constitution provides that "it shall be a fundamental responsibility of the State to attain, through planned economic growth, a constant increase of productive forces and a steady improvement in the material and cultural standard of living of the people, with a view to securing to its citizens the provision of the basic necessities of life and this includes the right of shelter." 

Bangladesh is a party to numerous international and national instruments that guarantee the right to habitation and housing for every citizen of the country. The government, therefore, has a responsibility to ensure the provision of this right. Article 25 [1] of the Universal Declaration of Human Rights provides that everyone has the right to a standard of living adequate for health and wellbeing of himself and of his family, including food, clothing, housing and medical care and necessary social services and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control. 

Article 11 of the Covenant of Social, Economic and Cultural Rights [CSECR] provides that the State parties to the present Covenant recognise the right of every one to an adequate standard of living for himself/herself and his/her family, including adequate food, clothing and housing and to the continuous improvement of living conditions. The State parties will take appropriate steps to ensure the realisation of this right, recognising to this effect the essential importance of international co-operation based on free consent. 

Bangladesh is one of the heavily-populated countries in the world. Due to gradual increase of population growth and rural-urban migration, the government could not meet its commitment of securing a shelter for every citizen of this country and as a result, private sector developers' role in this regard became essential. 

In Bangladesh, the real estate business started in the capital city Dhaka in late 1970s. There were fewer than five companies engaged in this business during those times. In 1988, their number rose, in Dhaka city alone, to 42. The government enacted a law in 2010, namely Real Estate Development and Management Act 2010 which provides necessary provisions for overall management of the real estate businesses in Bangladesh (http://bip.org.bd/SharingFiles/201307211331591.pdf). 

The Real Estate and Housing Association of Bangladesh (REHAB) was formed on December 12, 1991 with an objective to promote the real estate development in the private sector. It is the only recognised organisation for real estate developers in Bangladesh. There is a notification, dated May 21, 2017, issued by the Ministry of Commerce, which provides for compulsory REHAB membership of all the developer companies with reference to Section 13 of Trade Organisations Ordinance 1961 (http://www.rehab-bd.org/mis/attachment/upload/86_dynamic_notice_0.pdf).

The health of a real estate sector of a country is a barometer of the national economy. Real estate prices and general economic conditions are interlinked. The sector has an extensive potential to attract investment to its various segments. However, progress is possible only with the combined efforts of this industry and the government. For this reason, the government enacted the Act of 2010 and issued a notification, dated May 21, 2017 to keep the real estate businesses under surveillance and also to solve housing problems in the country. The law seeks to protect interests of all the developers and support development of the real estate sector.

The REHAB is legally authorised to take action against its members for flouting agreements between the land owners and the developers. Sometimes, membership is even cancelled after investigation. In recognition of the member's responsibility and obligation to customers, land owners, fellow members, the public and the country, the executive committee (EC) of the REHAB of 2008-2009 period, exercising the power conferred upon it under Clause VI. B of the Memorandum and Articles of Association of the REHAB incorporated under the Companies Act, 1913 (new 1994), adopted the bye-laws on code of business conduct for its members. 

Violation of the code of business conduct by any member of REHAB is considered as detrimental to the interest of the real estate sector. The association may issue a show cause to the offending member. Such notice shall specify date, place and time of hearing so as to allow the member an opportunity to defend himself before the executive committee. If the EC finds enough grounds to conclude that the member has violated the code of business conduct as outlined in the bye-laws, then the executive committee may impose an appropriate financial penalty on the member or may even suspend or cancel its membership provided that the EC meeting of so convened shall be attended by at least two-third members. Four-fifths of members present shall vote in favour of the resolution. Such cancellation of the membership of an offending member may be intimated to the public through media.

The Bangladesh Land Developers Association (BLDA) is a national-level representative organisation of private sector real estate developers. The BLDA plays a pivotal role in ensuring that developers' views are heard by the relevant authorities and government agencies. Its guiding principle is to provide responsible leadership to all property developers in building quality housing and real estate for the nation.

However, land owners and apartment buyers face manifold problems while dealing with land developers. Such problems may include but are not limited to selling of an already sold apartment, not receiving handover on time, price escalation after negotiation, etc. Recent newspaper reports show, complaints against the land developers are increasing day by day. The  government and its affiliated organisations need to address this matter with more care and sincerity to ensure that real estate businesses flourish in Bangladesh keeping a balance between the rights of land developers and customers, land owners,  the public and the country. 

The writer, an advocate of the Supreme Court, is Research Assistant (Law), Bangladesh Institute of Law and International Affairs (BILIA).

tasmiah.nuhiya.ahmed@gmail.com




 
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