Land shares are sold with a promise to build a flat of a certain size later. But in many cases, buyers do not know the approved design, the construction capacity, how the money is used, where the flat will be, or whether the handover is legally guaranteed. So, they invest money but cannot be sure of getting the flat on time or getting valid ownership.
The problems with this model are many. The same land or building is sold as shares to multiple people. Money is collected without proper approval. Construction quality and structural safety are not ensured. And there is no transparency in how money is used. Because land ownership remains undivided, problems also come up later over selling the land or flat, mortgaging it, distributing it among heirs and establishing separate ownership.
Real Estate and Housing Association of Bangladesh (REHAB) President Ali Afzal came up with the observations at a press conference at the CIRDAP auditorium in the capital on Sunday.
He demanded a ban on unregulated housing businesses that sell shares of land with promises of specific flats.
The association says about 40,000 citizens have already been affected by this business model. About 10,000 cases are pending, with buyers’ money and ownership stuck. If effective steps are not taken, REHAB fears about Tk50,000 crore could be stuck in legal complications related to such projects in the next two to three years.
An investigative report published recently found 9,823 cases pending as of 30 September over fraud allegations in land-share housing, REHAB said. Those cases involve about 40,000 buyers and about Tk12,000 crore, according to the report.
REHAB, however, does not oppose legal joint ownership or transparent investment, the president said. But business should not be run in the name of partnership where there is no guarantee of flat rights, legal ownership and final handover in return for investment. The Real Estate Development and Management Act 2010 should be properly enforced, with new provisions if needed, Afzal said.
Many buildings under these projects have discrepancies between the approved design and actual construction, with allegations of building code violations. ‘Inspect 100 buildings’, the REHAB president said, ‘and nearly each will show some deviation. Buildings under land-share housing projects should be brought under independent technical verification.’
It also demanded investigation into allegations of the same land being sold multiple times and of forged deeds, and action against individuals and firms in proven cases. Every project should keep transparent accounts of fund collection, construction costs and progress, and appoint qualified architects, engineers and professional staff, the association said.
REHAB Senior Vice President Abdur Razzak said the organisation’s regular work as the country’s top trade body for the housing sector has been disrupted for about three months in the name of an investigation.
He said REHAB is fully cooperating with the ongoing investigation by the Ministry of Commerce. But the leadership, administrative activities and regular organisational decisions of a national trade body should not be left uncertain for long. Allegations should be verified and a decision taken quickly, he said.
Speakers said the Ministry of Commerce is the regulator and supervisor of the country’s trade bodies. REHAB is ready to cooperate with the ministry’s lawful directives and investigation. But they want effective steps from the ministry to remove the existing uncertainty over the association’s administrative and organisational activities.
Vice presidents, directors and members of REHAB were present at the press conference.
