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Calls for Sri Lanka to regulate its property sector

Property Markets / Outlook

Australia

Mar 08 2017

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Al Gerard de la Cruz

A group of stakeholders in real estate sounded a call this week for a more regulatory, professional industry.

The South Asian country currently has little to no formal system of certifying or registering real estate brokers, agents and developers. This unregulated environment has resulted in a rise of unscrupulous transactors.

“Everyone should not be able to become a real estate broker, there needs to be some kind of regulation,” Richard Buultjen, managing director and chief executive of R B Realtors and Consultancy, told Lanka Business Online, lamenting that even “housewives and three wheel drivers” can become brokers.

“Most of these people don’t know the correct market value of land and housing, they just want to make a quick profit. This kind of unprofessional activity can ruin the market.”

Regulatory measures would prevent erring developers from undermining the sector in the long run. “The emerging and perhaps urgent need of the real state industry is for some type of regulation to be introduced in order to regulate the activities of all players in the sector including agents and developers,” said Roshan Madawela, chief executive of the Real-estate Intelligence Unit.

Developers should also be subject to the same stringent screens. “Before approvals are given for developers, their capabilities should be screened, mainly for funding, most of these projects depend on pre-sales to fund the construction,” Buultjen said. “This is a risk for the buyers because if they can’t sell the apartments the project will not be completed.”

Sri Lanka could be looking to skirt similar troubles in India, where the high court has intervened lately in consumer complaints related to delayed turnovers and project completions.

“It’s better to be proactive rather than take a reactionary or reflex measures post any negative incident,” Buultjen said.

SOURCE: Property Report

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