CCI Can’t solve all real estate problems, says the Chairman
Mr Ashok Chawla, CCI or Competition Commission of India Chairman recently gave a statement saying that not all real estate sector problems can be solved by CCI and asked for a sector specific regulator. He further stated that CCI can play a role only when the entity in question is highly dominant and abusing its position.
He added that due to huge competition in this field, not every builder can enjoy a dominant position in every area. The Commission can extend help only if real estate companies act collectively forming a cartel, but this is not the case that is visible and the practices followed by them are just a little similar to a cartel.
The Commission is playing a proactive role by looking at those practices that are quite common and trying to find if those practices are being carried out as part of a formal or informal understanding between several players. Mr Chawla further reiterated that it is an offense to indulge in predatory pricing, but this happens only if a dominant position is being enjoyed by the entity for a long period of time.
All over the country, CCI has been investigating more than seventy real estate developers. Some of these developers are Parsvnath Developers, Unitech and Omaxe besides several Mumbai real estate developers. They are under scrutiny for their alleged one sided agreements with the buyers and arm twisting them by colluding with each other.
This scrutiny is being considered as one of the biggest in the industry. For the past few months, CCI acting as competition watchdog has sent many notices to these builders. They have been asked to provide their operation details and buyer agreements.
The Director General of the Commission has been asked to conduct investigations regarding usual practices carried out by several real estate developers. Many times, they announce projects without taking any approvals from the concerned authorities. Sometimes, they do not reveal the buyers’ applicable costs during the time of purchase. There are one sides clauses also that helps developers if they delay project completion, increases or decreases the apartment size or change plans of buildings while the project is in the middle.
Source: Business line
CCI, Competition Commission of India, Mumbai real estate developers, Omaxe, Parsvnath Developers, Unitech
