Friday, October 28, 2011

THE PROBLEMS WITH REAL ESTATE DEVELOPERS AND HLURB

The Housing and Land use Regulatory Board (HLURB) has many functions dealing wth land development, and one of its primary functions is to protect the public from developers and unscrupulous practices.

The problem is that is not happening.  HLURB may be responsible for administering the laws of the land and its very own orders, butr enforcement is another problem altogether.

From our experience, issues with real estate developers can be sourced back to the very way HLURB operates.

It seems at the very start of a development, HLURB and its Board of Commissioners have given in to the demands of developers and not in the interests of the buying public.

Why else would, HLURB make a Building Permit a post requirement to a License to Sell and Certificate of Registration, rather than a prior requirement as it had previosuly been.  It is seen as a stance to help and aid the government with housing, the issue being that the Building Permit is an expensive cost for a developer, and they need to market their product before paying out the large expesne for a Building Permit.

Surely, in the case of condominiums, how would this ever be in the interest of government housing?  When the government is concerned about finding housing for millions of homeless people in Manila, then how does the building of condominiums help this issue.  It should not be forgotten, that condominiums are built for people with money, it is not for the poor or homeless, it is a big money earner for the developer.  HLURB have given sanctions to the real estate developer to do what he wants, right at the very start of any development, and this is confirmed with the issuance of a "Temporary License to Sell".

This "Temporary License to Sell" is for developers to be able to "market" their development before the process of obtaining a License to Sell and Certificate of Registration.  It lasts for 6 months.  The question is, under a temporary License to Sell, are you just not allowing the developer to already sell their product?   Selling is one thing, marketing is another.  So the developer is then being allowed to sell their product, even before they go through the complicated procedures of applying for a proper License to Sell and Certificate of Registration.

Surely, all condominium projects rely on pre sales, selling before completion of the project, so how can you allow selling before even approval of a Building Permit for the project.  The License to Sell, allows the HLURB to issue a completion date for a project or development, if the developer is already selling on a Temporary License to Sell, then what dates is it giving its customers from completion of building of their units?

It seems that once, License to Sell, Certificate of Registration, Development approval and Advertisement approval has all been okayed with HLURB, it is then left to their monitoring section to regularly check that the developer follows the development as per the plans submitted to HLURB.  Ocular inspections of the developments should be every 6 months, this is proving impossible for HLURB.

This has proven to have failed, as HLURB struggles through all its procedural systems and real estate developers fail to provide the necessary documentation to get even a License to Sell or Certificate of Registration.

As of September 2011, the ENCR region of HLURB has some 300 developments with Cease and Desist Orders, they have no License to Sell and no Certificate of Registration.  Yet some of these developments are still being built and sold.  Developers just continue to sell, even if they cannot comply with HLURB instructions and orders.

HLURB is in a hole it cannot get out of.  It has in some ways relaxed the system for real estate developers to start their developments, but these developers cannot then abide by the rules, regulations and orders that HLURB hand out.

Developers are ignoring anything HLURB throws at them, as their only powers seem to be archaic fines.  10,000 peso's does not threaten any real estate developer.  Certainly, within the developers who concentrate on condominiums, where the sales of units start at a bare 1 million peso's upwards, then what does a 10,000 peso fine represent?  Nothing! 

The committe for Housing at the House of Representatives realises that these fines are insufficient, but still it seems the people wait for Bills to be passed.  HLURB need the power to enforce the law, and enforce their orders.  Otherwise, developers will continue to take advantage of the public.


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