8/12/2019 13 INDIA REAL ESTATE Make hay while the sun shines

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INDIA REAL ESTATE Make hay while the sun shines!

When confronted with danger the Ostrich digs its head in the sand, with a belief that if it canignore the impending danger, the danger will also ignore it. I had slowly started to believe in theOstrich theory but my sane side cautioned me to take a more rationale approach. In Indiaeveryone is so carried away with the real estate boom that safety is being ignored and

compromised.

The players in the business of real estate are the bankers, financial institutes, insurancecompanies, developers/builders and not to forget the end user. The bankers are busy pumpingfunds in housing loans, which are of course considered low risk - high return investment, realestate funds and financial institutions are making a uick buck while they can, keeping an keeneye on the e!it strategy in case of a crash, builders and developers are busy racking in millionswith no responsibility or accountability and finally the common man is content with the "feel goodfactor# that his investment is going to continue rising by a whooping $%-&%' annually at least asper the hundreds of articles on the real estate outlook for India. (eason enough for all with a littlee!tra cash to make an investment. )very one is happy and every one is making money, so whythis fuss about safety*

+et me start by asking, how much time does it take for a ank or for that matter Insuranceompany to go bankrupt* .you guessed wrong. &% seconds is all it takes. Thats whatit took during the 0orthridge )arthuake of 122& in 3nited 4tates and the story repeated thefollowing year when an )arthuake struck 5obe, 6apan. The estimated loss was so many illion7ollars that the lue hips had no option but to declare themselves bankrupt and eventually the8overnment had to step in to partially bail them out. The (eserve ank of India has thrown somecaution to the industry, but the magic of "(eal ucks# have blurred these warnings. +et ushypothetically speak of a scenario where an earthuake strikes say $%% 59 from 9umbai or forthat matter 7elhi :dont be surprised there are many fault lines running within that distance;. Theimmediate effect would be that hundreds of buildings would come crashing down, and thousandsmore would have sustained un-repairable damage, something similar to what happened in

ow will the ankers recover the disbursed loans when the veryproperty they have financed does not e!ist* Would the insurance companies be able to foot thebill for the damage claims* )ven large banks like III and >7? would find it ne!t to impossibleto absorb this loss. The salvation for smaller banks and insurance companies would be in gettingdeclared ankrupt.

?or those who are not so familiar with the seismic @argon, ma@ority of the buildings in 9umbai or7elhi are not even )arthuake (esistant - +ife 4afety implying that these would definitelycollapse in a seismic event. The buildings that are )arthuake (esistant A +ife 4afety would haveto be demolished and re-built as these are primarily designed for saving lives of its occupants bypreventing total collapse. +ife 4afety buildings absorb the Buake 4hock by inflicting structuraldamage upon itself.

)arthuake Crotection is classified into three categories, )arthuake (esistant A ?ullyOperational, )arthuake (esistant A Immediate Occupancy and )arthuake (esistant A +ife4afety. 4imply stating that a building is )arthuake (esistant has no meaning as it does not imply

anything as to its performance, survival ability or post uake use. There e!ist well documentedliterature like ?)9owever no attempt has been madeto include information for sensitiEing the engineers and the public on various levels of protectionpossible. This is in total contrast to the policy being adopted in countries like 6apan and 3nited

8/12/2019 13 INDIA REAL ESTATE Make hay while the sun shines

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4tates. < direct conseuence is that even those who can afford and would desire a higher level ofprotection are unable to do so due to lack of awareness.

0ot many are aware, that even in our ma@or cities and that includes the 0ational apital, not asingle hospital will be functional incase of an earthuake. >ospitals the world over in seismicallyactive regions are constructed to )arthuake (esistant A ?ully Operational standards. In India theauthorities have not yet recogniEed the various categories of protection. Who would treat thein@ured and the sick at a time most reuired remains unanswered. Interestingly enough as per theinformation from Crime 9inisters Office, (s. 11$.&2 rores has been spent on a ase-Isolatedhospital at hu@ from the Crime 9inisters 0ational (elief ?und. This hospital should be as per)arthuake (esistant A ?ully Operational standard.

owever for reasons best known to the offices of power it never saw thelight of the day. 4uch media frenEy has again gained momentum recently. Only time will tell if thebill finally gets tabled in the current budget session or certain sections have been once againsuccessful in subverting its implementation.

There are three key issues in the G(eal )state 9anagement :(egulation and ontrol; illG thatcan make a significant impact on the industry and the common man. ?irstly, all built apartmentswould have to be sold on carpet area and not super built-up area like being done now. arpetarea is easily verifiable and can be calculated after taking a few room measurements. This wouldensure that the buyer is not cheated and he gets what he is paying for.

4econdly the transparency in the sale area would also make the land area calculations simpler. Itwould no longer be possible for the not so honest builders to siphon off society land inconnivance with corrupt 9unicipality officials. ?or e!ample incase the built-up area of a multi-story apartment block is 1,H%,%%% suare foot and ?4I/?

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