Regulating Real Estate Developers
It is important to know important things before contracting with a real estate developer who will oversee construction projects, to ascertain the extent of his ability and experience, to be sure about the future of the project, and to enhance mutual trust between the investor and the developer.
A real estate developer is considered an important part of every successful real estate investment. Choosing a real estate developer as an investment partner is the most important initial step of real estate investment. A real estate developer is a person or a company developing a particular area or location, or rebuilding and updating an existing entity. They develop the project idea, feasibility study, sources of financing, consultant identification, contracting, marketing study, and sales strategy of the project. They have multiple options for all these tasks and accurate knowledge of the real estate market. They can anticipate the project outcome and aim of development after the completion period. Another important task of the real estate developer is to coordinate the various activities of the development process, which transform the creative idea from an idea on paper into reality on the ground. The role of the developer differs entirely from the role of the contractor and consultant, which the Iqbal Institute of Policy Studies (IIPS) discusses in this article and why is it important to regulate them.
Importance of Real Estate Developer
Where an investor is concerned with investing in land for a limited period for buying, selling, and seeking profit without knowing much of the important data, a real estate developer finds new raw land to produce real estate products that meet the real needs of the community, between residential, industrial, or commercial products. The developer is not a contractor or a real estate consultant; he is a development manager who provides the best idea for the project through detailed feasibility studies, funding sources, selection of the best consultant, the most suitable contractor, and the marketing plan and sales strategy. The name “real estate developer” is only for those who provide integrated services in the field of real estate, and those who add value that helps to build the project quickly, while avoiding mistakes in the work, and provide good management and marketing of the property and maintain its value. During the construction phase, the developer will do the work of the manager, who follows the progress of the work according to the time and financial plan of the project, through direct supervision and careful follow-up, and the developer during this stage also follow the changes and problems that occur on the project and solve them by the lowest possible material and temporal costs. It is very important to know some important things such as detailed information about the project, the timeline of the project, the developer’s history of past projects, time of completion, current projects, cost study, alternative plans, penalty clauses, and engineering consultants before starting to protect from fraud and loss.
Registration of Developer with Authorities
According to the Islamabad real estate regulation bill 2018, the regulatory authority must grant a registration license to a developer within 30 days of submission of their application. In doing so, the authority will provide a registration number, login id, and password to the website portal of the authority. The developer will then be required to fill in the details of their project and prominently mention the registration number of the project. If the application is rejected, it would be recorded in writing, provided that no application will be rejected without permission being heard by the applicant. The developer’s registration will be valid till the completion of the project. In case of any natural disaster or calamity, the authority can also extend the registration for one year. If the developer makes default in doing anything required under the act, or violates any terms of the approval, or is involved in any unfair practice, the authority can revoke the registration. Unfair practice refers to the promotion or sale of any real estate project by adopting deceptive methods. The registration will not be revoked without providing prior 30-day notice to the developer. As a consequence, the authority will bar the developer from accessing the website and specify the name in a list of defaulters for future reference. Furthermore, the authority shall also direct all the banks to freeze the account of such a developer. The authority may then consult the federal government to take necessary actions to fulfil the project.