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INTRODUCTION
Real Estate and Housing Association of Bangladesh (REHAB) is a state owned organization
which is conducted under the Ministry of Ministry of Housing and Public Works of
Bangladesh which was founded in 1991 with 11 members. The ever increasing of the country
people and economic growth of Bangladesh lead to increase the demand of Plot or Flat, so it
is also necessary to ensure the rights of the consumer or buyers of the Plot or Flat for
Bangladeshi people as well as foreigner also. Taking this responsibility REHAB encoded
some rules and regulations to ensure better services to its members with the help of United
Nation Building Codes, prescribed for Bangladesh. Now its total members are above 1200
with 260 developers companies. REHAB plays a vital role to make better in housing business
sectors and generates revenue for Bangladesh Government from registration fees, tax, vat and
Utility Service Charges.
The real estate sector is one of the fastest growing and thrusting sectors in Bangladesh.
Infrastructural development is highly important for a country to rise as a developed nation
and to ensure housing facilities for the citizens of the country. But in spite of compared to the
importance of this sector, there have been studies which are far below the required number on
the real estate sector and its accessibility to financing. This study is exploratory in nature and
may work as the basis of knowing the present scenario and indicating any future study.
1.1 OBJECTIVE OF THE STUDY
1.1.1) BROAD OBJECTIVE
The broad objective of this report is to do a widespread analysis of the status of REHAB in
Bangladesh for the reason of gathering information regarding real estate sector and to help
decision makers to come in this sector.
1.1.2) SPECIFIC OBJECTIVES
The specific objectives of this study are:
To know about REHAB broadly and precisely
REHAB
REHAB ACTIVITIES
REHAB organizes its major annual event, REHAB Housing Fair, each year in Bangladesh
for the members, financial institution, building material providers and above all, the potential
clients. Due to the political turmoil in the country, REHAB was unable to hold the Housing
Fair planned for November 06. However, the grand, yearly event will now be held in the third
week of February, 2007. Besides, REHAB had already organized a few Housing Fair in New
York and London during the past years. These fairs proved to be vary rewarding for the
REHAB members from the business point of view, and these also served to enhance its
reputation. With the requesting support and encouragement
stake holders, REHAB will continue to uphold the sprite with its was conceived that of
providing shelters with modern amenities for the citizens of Bangladesh and render social
service to our society.
2.4
PRESENT SCENARIO
REHAB is the only trade organization of Real Estate Developers with a current membership
of 260 Developers. All major institutionalized Developers are members of this organization.
REHAB is also the "A Class" member of the Federation of Bangladesh Chambers of
Commerce and Industry (FBCCI). In the recent years REHAB has played a very significant
role in nation building through Real Estate Development by its members. The members of
REHAB contribute a large amount of revenue to the Government exchequer in terms of
Registration Cost, Income Tax and Utility Service Charges.
REHAB organizes its most colorful annual event REHAB Housing Fair each year in
Bangladesh for the member developers, financial institutions and building material providers.
It has already successfully completed some Housing Fairs; most recent fair was held in
Chittagong in 2014. To foster the growth of Real Estate Sector REHAB plans to organize
Housing Fair abroad for the Bangladeshi individuals who are living different countries of the
World to buy apartment, land and commercial spaces in their home country. Accordingly, the
first - ever Housing Fair abroad organized by REHAB on 2014 at New York, USA.
2.6
REHAB SECRETARIARIAT
REHAB has its own office premises (2100 sft.) in the NationalPlaza situated in a beautiful
location just opposite to Pan Pacific Sonargaon Hotel and adjacent to Sundarban Hotel.
REHAB has a strong Secretariat with high professional and technical staffs and outsourcers
consultants. Some of the services of REHAB secretariat are outlined below:
Contribute and participate in the planning and policy making of Housing Sector.
To provide support to the Foreign Investment to invest directly in the Real Estate
Sector of Bangladesh and in its linkage industries on a joint venture basis.
Press and publication
Customer service
Social welfare
2.7
QUALIFICATION
Save as provided herein in the regulation contained in form B third Schedule of The Act and
Trade Organizations Ordinance 1961 under Section-8 all such amendments incorporated vide
Govt. order No. MC/ABA-6/CA-4/20021421 dt. 31.7.2002, shall apply to the Association.
2.8
MEMBERSHIP
The members of the Association shall consists of persons, firms, companies and corporate
bodies engaged in Real Estate Development and Housing Industry who apply to the
Association for Membership in the manner herein provided and whose applications are
accepted by the Executive Committee.
The Association shall have only one class of members called General Members. The
Annual Subscription of the members shall be Taka.25, 000 The Admission Fee to Association for members shall be Taka.25, 000i Every candidate for Membership shall sign and deliver to the General Secretary, duly
proposed by a member and seconded by another application in the prescribed Form
together with the Admission Fee and the Annual Subscription.
The decision of the Executive Committee for or against any candidate for admission
as a member of the Association shall be final. The Committee may admit or decline to
admit a candidate as they may in their discretion think fit. The Executive Committee
shall not be bound to give any reason for refusing admission of any candidate.
A candidate thus elected by the Executive Committee, shall forthwith become a
member of the Association, subject to all rules and regulations of the Association.
Members representing firms or other body, whether corporate or not, shall be
severally. As well as jointly liable for payment of all subscriptions and dues in respect
of their membership.
A list of members shall be kept in a register which shall be set forth the names and
addresses of the members for the time being and in which all changes in membership
from time to time taking place be recorded. The Register shall also show the trade and
industry
in which they are engaged together with the names of the authorized
representatives.
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Number of Members
1200
1000
800
600
Members' Increase
400
200
0
1991
2008
2010
2014
Year
equivalence or implicit rent is the amount of rent that homeowners could charge if their
homes were leased to others instead of living in the homes themselves. Because implicit rent
is not a market transaction, such as the payment to a landlord from a renter, it is estimated by
measuring the change in market rents for rental housing units with similar characteristics and
in similar locations as the homeowner units.
The contribution by REHAB members to national GDP is given below for some period.
Year
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
GDP Contribution %
8.63
8.48
8.3
8.12
7.87
7.64
7.49
7.34
7.2
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
From the above figure, it is seen that share of Real Estate, Renting and Business service
sector that means share of all REHAB members has a downward trend. But that does not
show the real picture. To better understand the growth scenario, we have to analyze the
growth of real estate sectors contribution. The growth trend is here.
Year
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
GDP
Contribut
ion %
8.63
8.48
8.3
8.12
7.87
7.64
7.49
7.34
7.2
Contribution (in
Crore Taka)
Growth %
19,440
20,106
20,913
21,678
22,404
23,147
24,097
24,970
25,981
--3.43
4.01
3.66
3.35
3.32
4.11
3.62
4.05
It is seen from the table that contribution of real estate sector is increasing every year because
the growth is positive as in the last column of the table.
3.3 CAUSES BEHIND PRICE HIKE AS REVEALED BY REHAB
Apartment price hike is an important issue from the perspective of both the clients and the
developer companies. The price hike of apartment mainly depends on 2 parameters.
1. Increase in the price of the land, and
2. Increase in the construction cost of the apartment.
Average Price of Apartments (Taka/Sq. feet)
% increase
Year
Between 2000
to 2010
Area
2000
2005
2010
Dhanmondi
2400
3300
14000
483%
Gulshan
2450
4500
14000
471%
Banani
2200
3100
12500
468%
Baridhara
2150
4000
20000
830%
In the first decade of 21st century, the price per square feet is increased to 400% to 800%
particularly in Baridhara, Dhanmondi Gulshan, and Banani area Compared to the price
increase of the earlier decade. Now, the 2 main reasons for which the price of the apartment
is increasing will be discussed below.
A. Increase in the price of the land:
In the first decade of 21st century, the percentage increase in the price of per katha land is
very high about 500% to 1000%, particularly in Baridhara, Dhanmondi Gulshan, and Banani
area Compared to the price increase of the earlier decade. There is no control of the govt.
over the price increase of land so this increased land price have a direct impact on apartment
price and potential buyers.
Price of land (Taka/Katha)
% increase
Year
Between 2000 to 2010
Area
2000
2010
Dhanmondi
5000000
40000000
700%
Gulshan
2200000
25000000
1036%
Banani
2000000
15000000
650%
Mahakhali
1800000
12000000
567%
Bricks
Town
Unit
2005-06(Tk)
2011-12(Tk)
Dhaka
1000
3192
7116
Narayanganj
1000
3206
6100
Chittagong
1000
3308
6600
Rajshahi
1000
2615
5500
The price of bricks increased about more than double. This price hike of bricks directly
increases the apartment price.
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Item
Fine sand
Town
Unit
2005-06(Tk)
2011-12(Tk)
Dhaka
1 Bag
724
1300
Narayanganj
1 Bag
729
1260
Chittagong
1 Bag
708
1300
Rajshahi
1 Bag
739
1231
The price of sand increased by 90 100% in the recent years. In 2005 it was cheap. This
recent hike in sands price increases the construction cost.
Price hike trend of 60 grade rod:
Item
60 grade rod
Town
Unit
2005-06(Tk)
2011-12(Tk)
Dhaka
50 kg
1875
3157
Narayanganj
50 kg
1898
3100
Chittagong
50 kg
1876
2900
Rajshahi
50 kg
1831
2850
The price of rod is increased by between 50-60 %. It is a major element of the construction
work so increase in its price will result in the price hike of the apartments.
Price hike trend of cement:
Item
Cement
Town
Unit
2005-06(Tk)
2011-12(Tk)
Dhaka
1 Bag
284
430
Narayanganj
1 Bag
288
370
Chittagong
1 Bag
280
424
Rajshahi
1 Bag
274
465
The price of cement increased by 30 60% in the recent years. In 2005 it was cheap. This
hike in cement price increases the construction cost.
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The Real Estate developer companies are criticized of charging a lot of money for an
apartment but after above discussion we knew that due to rise in the price of related materials
the apartment price hike takes place. REHAB is also bound to do so for the same reasons.
3.4 CODE OF CONDUCT OF REHAB WITH DIFFERENT PARTIES
Bye- Laws on Code of Business Conduct
REHAB is devoted to the growth of real estate sector in Bangladesh. To conduct their
business with a high degree of professionalism the executive committee of 2008-2009 period
approved and adopted the bye-laws on code of business conduct. Any violation of code of
business conduct by any member of REHAB shall be considered to be prejudicial and
detrimental to the interest of the Real Estate Sector and the association and the Executive
Committee may issue a show cause to the offending member. Such notice shall specify the
date, place and time of hearing so as to allow the member an opportunity to defend himself
before the Executive committee. If the Executive Committee finds enough grounds to
conclude that the said member has violated the Code of Business Conduct as outlined in this
Bye-Laws, then the Executive Committee may impose an appropriate financial penalty on the
said member or may even suspend or cancel the membership.
A. Code of Business Conduct with Customers:
The members of REHAB are not allowed to run construction work or sell an
apartment without obtaining the plan and project approval from the appropriate
authority of the Government like RAJUK, CDA, KDA, RDA etc.
The members of REHAB may issue letter of allotment in accordance to their own
format or in accordance with the standard format of such agreement as prepared by
REHAB. The deed of agreement must clearly specify the size, price of the amount for
reserve fund for the apartment owners association. It must also state whether the
customer or the REHAB member will pay for gains tax, registration fees, stamp duties
e.g. defaults in payment of installments may result in penalty charge by the REHAB
members.
The gross area mentioned in the deed of agreement shall mean the area of the
apartment plus the proportionate share of the common area meaning stair landing
area, reception area, committee room area, drivers waiting room, mosque etc.
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If the promised area is more or less than 2% the party shall be liable to compensation.
If the customer does not accept the agreement then REHAB will refund the money
within 3 months upon a written request.
If the customer is a defaulter the members of REHAB may cancel the allotment of
land upon a 30 days notice of cancellation.
The members will deliver the allotted apartment as per the schedule date. In case of
delay the customers are entitled to rental compensation that is agreed and mentioned
in the deed. This payment may delay due to natural disaster.
REHAB members are not responsible for the non-payment of govt. utility bills by the
customers.
If the price of construction materials increase by 10% or more REHAB members may
charge a price increase for the apartment. REHAB members may use material of
equivalent standard in case of scarcity of materials inscribed in the agreement. The
customers can supply their own finishing materials during construction.
The REHAB members might not complete the work due to natural disaster but it must
be informed in writing. REHAB members need not to compensate. If the project is
abandoned for any other reason they are entitled to compensation.
REHAB members can avoid cash flow problems by mortgaging the apartment to a
government approved bank but they should clear all loans before giving the plot.
REHAB members will help the customers in availing loan from any bank.
The members will send notice to customers for the registration of the said property.
After handing over the apartment to the customer, REHAB member shall give the
customer free services for a maximum period of one year for defect liability of
construction work
In case of joint venture development, the REHAB member will ensure that a deed of
agreement is made with the Land Owner clearly specifying the percentage share of
the Land Owner and the percentage share of the REHAB member in the completed
building. A schematic diagram should be attached to the deed of agreement for the
sake of clarity. The deed of agreement with the Land Owner must also state the cash
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amount (if any) payable to the Land Owner must be specified along with the schedule
time of payment, who will pay the utility connection charges.
The gross area mentioned in the deed of agreement shall mean the area of the
apartment plus the proportionate share of the common area meaning stair landing
area, reception area, committee room area, drivers waiting room, mosque etc.
In case the Land Owner is handed over less than his due percentage of the total built
up area, the deed of agreement between the REHAB member/ Land Owner will
specify at what rate per sq. ft. the Land Owner will receive compensation.
REHAB member shall not mortgage the apartments or change or substitute the
apartment originally allotted to the Land Owner without the written consent of the
Land Owner.
REHAB member shall deliver the apartments allotted to the Land Owner as per the
schedule date of handover mentioned in the deed of agreement. In case of delay, the
Land Owner will be entitled to rental compensation.
REHAB member shall not be held responsible for the failure of government agencies
to provide the necessary utility services e.g. gas, water sewerage, electricity etc.
The Land Owner can to supply his own finishing materials to the REHAB member
during the construction of the apartment only if the REHAB members permit it.
After handing over the apartment to the Land Owner, REHAB member shall give the
Land Owner free services for a maximum period of one year for defect liability of
construction work.
In the event that the REHAB member is forced to abandon a project due to
circumstances beyond his control e.g. act of GOD, political turmoil then the two
parties shall first try to resolve the dispute through mediation as outlined in section E
of this Code of Business Conduct.
REHAB members will conduct their business with honesty and integrity and refrain
from any practice that cause harm to fellow REHAB members.
REHAB members shall not make derogatory statements about any other fellow
REHAB member.
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REHAB member shall always try to extend cooperation to a fellow REHAB member
and try to enhance the unity of the REHAB members.
REHAB members shall not try to lure away another REHAB members employee by
offering higher benefits.
In case of dispute between REHAB members which cannot be solved bilaterally, the
matter must first be referred to the mediation cell of REHAB as stipulated in Section
E.
REHAB member shall not make any negotiation with Land owner in connection with
any particular plot of land for the purpose of development where any other REHAB
member has already entered into an agreement for the same land.
REHAB members shall deal with the public honestly, diligently and cordially.
REHAB members shall ensure that wherever they are carrying out their project, a
friendly and cordial relationship is maintained with the neighbors and the local
community.
REHAB members will be socially responsible citizens and ensure that their project
premises is kept clean and free from any health hazards and that there is no
environmental damage to the surrounding area.
REHAB member will follow the government guidelines and will not disturb
neighbors of their project site with noise pollution or undisposed garbage.
Care and candor must be exercised so that any party interested in receiving or
otherwise benefiting from the REHAB members offer will have a clear
understanding of the offer.
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CONCLUSION
As with the increasing population and economy housing demand also increases sharply in our
country specially in Dhaka city. With the increasing demand housing business is also
increasing as a consequence the work of REHAB is expanding. REHAB continuously
arranges different events in several times in a year. But in recent times it face problem of
arranging Housing Problem. This indicates a major problem in near future because of
political condition. After formation of REHAB real estate business expand rapidly in our
country because people believe this association but if the problem but to politics continued
the real estate business will face recession and people will face a great problem of housing
specially in urban area. The real estate sector nowadays contribute a huge to the national
GDP of our country this is possible because of the proper supervision and control of REHAB
on real estate sectors business institutions. Because of overall increase in inflation price of
relevant materials needed by real estate businesses also increases for that housing cost also
increase but REHAB always tries to keep housing expenditure within a range for people for
that so it make real estate business to keep price in pace of inflation but not more. The
association sets different codes for the sectors business organizations so that general public
can easily avail all relevant information regarding housing and can expense money to get an
actual property without any ownership or other problems. So REHAB is the association
which regulates the real estate sector of our country to fill both demand and quality of general
people and real estate sectors business organizations.
REFERENCES
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