Malpractices in Realty Sector

The brief write-up confines itself to the malpractices by corporate players in the realty sector. A random survey is, however, sure to reveal the reality that besides companies, several others- forms of entities- are partaking / engaged in the said sector. Among them, notably, are, besides the so-called (but dubiously so) proprietary concerns, ‘partnership firms’.  
Real estate companies are often proclaimed / dubbed as ‘soft targets’, because of their vulnerability to effective checks and balances, also easy to be tackled with ‘legal action’; that is so, by reason of the somewhat strict rules and regulations in place. That helps in keeping a strict vigil and control over their good governance. In the case of ‘proprietary concerns’, partnerships and other like forms of entities, however, there are no such governing rules and regulations, especially effective or easy-to-implement or enforce. So much so, malpractices, though often resorted to / indulged in by those types of players in the realty sector are invariably left unchecked or prove difficult to be taken on. In fact, the victims of malpractices by entities such as partnership firms are, for all practical purposes, in comparison with cases of corporate, placed in the worst position. Some of the related aspects may be found highlighted in the published article titled INVESTOR PROTECTION- A MYTH (2005) (3) KLJ 17.
To be precise, in the special enactments in force in many States governing the business of construction and sale of units of a building (‘Flats’ or ‘Apartments’), in the absence of any specific restrictive framework, such activities are allowed to be engaged in/carried on by any person, including, besides companies, any other person such as   individuals and partnership firms, whether ‘registered’ or not. For obvious reason, the same pattern is seen to have been adopted, also in the proposed Real Estate (Regulation & Development) Bill, 201_. In the Bill, the term ‘promoter’, as read together with the connected definition of ‘person’, is defined in the widest manner possible. In essence, the regulatory provisions are made applicable uniformly and in common to all, having no special regard to the legal form of the ‘person’ engaged in/carrying on such activities. According to a view, however, having regard to the aspect mentioned herein before, it might be desirable, especially in the larger public interest, to have restrictive provisions specially and exclusively, rather additionally made, applicable to those cases where the ‘promoter’ is one other than a corporate. For, that should go a long way in ensuring strict control and monitoring , thereby accomplishing the objective of regulating and bringing about discipline among the players not being corporate. Such special / restrictive provisions would require to be framed and incorporated in the regulatory law, after a careful consideration and duly taking into account the case specific pitfalls and the resulting woes and hardships that the consumers (i.e. purchasers /owners of apartments) are made to suffer in the hands of non-corporate promoters.