ALTERNATE DISPUTE RESOLUTION: AN COMPREHENSIVE SOLUTION TO REAL ESTATE BUSINESS

INTRODUCTION

Dispute resolution or dispute settlement is the process of solving disputes between two parties whenever a conflict arises. The term dispute resolution is also conversely used with conflict resolution. Dispute resolution techniques assist the resolution between parties which include citizens, governments, business entities, and corporations. It can be done in many ways either in courts or using methods like Arbitration, Mediation, or Conciliation which are done outside the courts. One of the most affected industries that witnessed dispute resolution is the Real estate industry. Real estate refers to any physical or real property like land, buildings, air rights, or underground rights below the land or above the land. It also deals with the construction of new buildings like residential, commercial, or industrial buildings.  

KINDS OF DISPUTE IN THE REAL ESTATE SECTOR

· Disputes regarding the title of the property

· Disputes between builders/developers and buyers

· Disputes regarding the inherited or willed property are also common

· Disputes regarding non-provision of occupancy certificate   

· Misuse of rented/leased property

CAUSES OF REAL ESTATE DISPUTES

· Incomplete information

· Land acquisition

· Delay in possession

· Modification in the layout

· Transparency

· Environmental concerns

· Fraud       

· Brokerage issues

· Maintenance-related issues

· Long litigation

SCOPE FOR ALTERNATIVE DISPUTE RESOLUTION MECHANISMS IN REAL ESTATE  

In the real estate sector, Alternative dispute resolution (ADR) can be used in numerous ways. Each party involved in the expansion, administration or management, acquisition and sale of the real estate, understands the implications of lengthy litigations and the impact that conflicts have on it for costs that are involved in resolving the dispute is even more expensive. Nevertheless, whenever a dispute arises, ADR can chip in and address the issue or conflict in a quick and cost-effective manner. ADR acts as an alternative to costly and lengthy litigations. In many cases, it widens the options available for resolving disputes and minimizes the costly litigations. The most commonly disseminated and used forms of ADR are arbitration, negotiation, and mediation. To opt for any of these methods one has to first determine the eccentricity of the dispute and the need of the parties involved to control costs, have a definite judgment with respect to that dispute, and also, most importantly, it maintains confidentiality and privacy of the parties.  

1.               NEGOTIATION 

It is one of the most frequently used modes of dispute resolution where parties settle a dispute by way of communication in which both parties satisfactorily make a compromise or agreement which favours both parties. In the real estate sector when parties land in a conflict or dispute they hesitate to approach the courts because litigation is not cheap in this sector. Real estate disputes are also common in India as many people from rural areas to urban areas of India have land-related issues that result in disputes. Poor land record maintenance, unclear mentioning of land titles, and several more types of land feuds have emerged in India as mentioned above. A PRS India Survey shows that on average a land dispute in India takes over 20 years to get resolved. So negotiation helps them by way of settlement and it is a time-saving process too, where people can save a large amount of time in comparison to normal litigation methods in a cost-effective manner. Negotiation features in some of the most standard arbitration clauses. One clause that indicates this feature is,

“Any dispute arising out of this agreement shall be tried to be settled friendly by the Parties. If the Parties are unable to settle the dispute friendly within 30 days, then the disputes shall be resolved by way of arbitration.”

Thus, negotiation is a prerequisite for the parties to commence arbitration or litigation in most dispute resolution clauses. This process makes sure that trivial as well as some important matters get settled without being escalated unnecessarily to a formal dispute resolution process.

2.               ARBITRATION

Arbitration is a form of alternative dispute resolution. This involves two or more parties agreeing to resolve a dispute out of court and having an impartial third party, called an arbitrator, make a final and binding decision based on facts and law. Arbitration has many advantages over traditional court proceedings, including flexibility in choosing an arbitrator, speed of proceedings, and confidentiality. Arbitration applications and proceedings in India are governed by the Arbitration and Conciliation Act, of 1996, which establishes the legal structure of arbitration in the country.

Due to its inherent complexity and the nature of the disputes that arise, the Indian construction industry presents challenges related to arbitration, requiring technically trained and qualified arbitrators. To fill this needs gap, India has introduced effective dispute resolution services specifically for the construction and infrastructure sectors. These services provide technically trained and qualified construction dispute arbitrators and bring together high-level professionals in real estate, construction, infrastructure, and other construction-related industries. They are assisted by the Supreme Court of India, retired judges from various High Courts, and elite arbitrators from the International Arbitrator Panel. These services have greatly expanded the capabilities of Indian arbitration courts and equipped them with effective dispute-resolution tools.

3.               CONCLIATION

Conciliation forums act as mediators between aggrieved parties, facilitating out-of-court settlement negotiations. It allows aggrieved parties to resolve their grievances before filing a complaint with the RERA authority (whether home buyers, developers or real estate agents). The very essence of justice lies in the speedy, and quick resolution of disputes. The primary aim of the complaint redressal mechanism under RERA is consumer satisfaction, which can be attained only if there is an authority to monitor the quick administration of justice. Conciliation forums play the role of such an important authority. 

ADVANTAGES OF ALTERNATIVE DISPUTE RESOLUTION

Contracts are agreements between two parties where contracts are enforced and enacted and wherever two minds meet then there is a very high possibility that conflict will arise. The use and advantages of ADR are directly linked to contract enforcement and management of it. In almost every sector or in many cases wherever ADR is used, it has built itself as a part of the contract, wherein parties involved have formerly consented to this process, to make agreements on possible problems which may appear in the future.  

The real estate sector or construction businesses are highly technical in nature and it is necessary to take a vigilant move and are required to be dealt with by professionals who have the requisite knowledge about the field and utmost understanding of the domain. ADR has now become a need of people in the real estate sector because of its evolving nature and for that ADR service providers should know the market very well. They not only need to understand the intricacy or complications of the field but also have an in-depth knowledge of the various facets of land, thereby enabling them to provide custom-fit solutions for disputes.

NEED FOR SPECIALISTS IN DISPUTE RESOLUTION PROCESSES

There is a need to hire someone who is a specialist or professional in ADR because he would have in-depth knowledge about the various facets of construction and infrastructure development in the real estate sector. Various parties approach specialist dispute resolution services or organizations or either referring to resolution boards or mediation councils; they should be assured that the professionals overlooking the dispute/conflict have the requisite skill set to understand the nuances of the same. 

CONCLUSION

ADR mechanisms like arbitration, mediation, and conciliation are much more economical and time-efficient than litigation.  Therefore, it is prudent that we try to incorporate them in a myriad of fields of law. One such field is real-estate which has a huge pendency of cases. Let’s delve deeper into the role that ADR can play in property matters. Since its inception, the Real Estate (Regulation and Development) Act (RERA) has brought to the fore-front a multitude of cases of consumer dissatisfaction in dealing with real estate developers and service providers. Huge delays in delivery of projects, hike in costs during construction, skewed builder-buyer agreement, and the absence of an effective enforcement mechanism have increased consumer trauma and agony over the years and has subsequently resulted in more no. of complaints being brought before the Regulator.

Nevertheless, it is also crucial to understand here that most of the disputes related to real-estate are highly technical in nature and are required to be dealt with by people who have the requisite knowledge and understanding of the domain. Since the real estate and construction sector is of a dynamic nature, professionals providing ADR services need to have a good knowledge of the market. They not only need to comprehend the intricacies and commercial aspects of issues but also possess complete knowledge of the lease of the land, thereby enabling them to provide tailor-made solutions for disputes.