Sunday, November 28, 2010

The Property Ombudsman: About Ombudsman

The office of the Ombudsman came into existence by the President's Order No. 1 in 1983 and began functioning in August that year. The headquarters are located in Islamabad and there are regional offices in Dera Ismail Khan, Faisalabad, Karachi, Lahore, Multan, Peshawar, Quetta and Sukkur.
Working at both Federal and Provincial level, the function of the Ombudsman is to provide relief to citizens who have complaints against government functionaries and departments involved in malpractices. Currently, there is no "property Ombudsman" in Pakistan. to add transparency to the real estate sector, there is an urgent need that the four professional governments appoint a property ombudsman in order to provide low cost and speedy justice to people with grievances.
The Principle Duties Of A Property Ombudsman Will Be To:
1) Investigate complaints against buyers/sellers, landlords/tenants, estate agents/builders and developers, determine the facts and announce judgment after hearing the grievances of the parties in dispute.
2) Issue instructions for the payment of compensation to the complaints.
3) Help improve the functioning of the real estate sector by highlighting shortcoming related to the way documentation is handled.
4) Suggest measures to the government aimed at enhancing transparency in the way real estate transactions are conducted, as well as new laws aimed at eliminating illegal practices prevalent in the sector.
Enhanced by Zemanta

Sunday, November 21, 2010

The New Real Estate Investment Trust Rules

Real Estate Investment trust (REIT) is a form of security listed on the stock exchange. They allow people to invest in major real estate projects. It was in 2008 that the Securities and Exchange Commission of Pakistan (SECP)issues regulations that enabled the formation of Real Estate Investment Trusts. in 2010, the SECP has issued modifications to those regulations to conform to the current market situation.
The new modifications include the following:
1) The minimum funding that has to be generated through a Real Estate Investment Trust has been reduced from five to two billion rupees.
2) the capital investment requirement from a Real Estate Investment Trust management Company (RMC) has been reduced from 500 to 200 million rupees.
3) A REIT may now develop and rent out a property ; earlier only development for sale purposes was permitted.
4) The RMC may now charge fees on a quarterly rather then an annual basis. The fees are based on the one percent of profit  the REIT earns from the sale of a project, or two percent from the REIT rental yield.
5) A single REIT may manage a single property by developing it for sale or renting it, or a mix of both.
These modifications have been made in order to offer flexibility and encourage small investors to form RMC's and launch Real Estate Investment Trusts, thereby making real estate investment a viable option. The first REIT is anticipated to become operational in 2011.
Enhanced by Zemanta