KARACHI: Chairman Consumers Association of Pakistan (CAP) Kaukab Iqbal has expressed serious concern over the rapidly increasing number of residential and commercial real estate projects being advertised in Karachi and across the country, and called upon the government to introduce immediate and effective legislation to protect citizens’ lifelong savings and take strict action against unapproved projects.
Kaukab Iqbal said that a large number of real estate advertisements were currently being published and aired, promoting new projects and attracting consumers through offers of cars, prizes, discounts and other incentives. However, an ordinary citizen often has no easy way of determining which builder is legally operating, which project has been approved by the relevant authority, and whether the developer actually possesses the required land and legal permissions.
He said that construction, housing and real estate activities were essential for economic growth, but economic activity could not be allowed to take place at the expense of consumers’ hard-earned savings. There have been instances where citizens paid substantial amounts for properties, only for projects to remain incomplete, possession to be delayed or their investments to become stuck for years.
The CAP Chairman said the government must first establish an effective regulatory framework for all builders and developers and no person or company should be permitted to launch, advertise, book or collect money from the public for a residential or commercial project without obtaining complete approval from the relevant authority.
He demanded that every real estate advertisement must prominently display the Approval Number, No-Objection Certificate (NOC) number and date of approval issued by the competent authority. Where a project falls under the jurisdiction of the Sindh Building Control Authority (SBCA), a Development Authority or any other competent institution, these details must be clearly mentioned in the advertisement so that consumers can verify the legal status of a project before investing their money.
Kaukab Iqbal said that verification of land ownership and the actual area of land must be made mandatory before any project is launched. Regulatory authorities should verify that the developer possesses sufficient land and legal rights for the project being advertised and ensure that multiple projects are not being marketed on the basis of the same land or inadequate land holdings.
He further called for clear regulations governing claims made in real estate advertisements, including prize schemes, cars, discounts and other incentives. Any misleading or false claim should result in strict action against both the developer and the concerned advertising or marketing agency.
Dubai-Style Escrow Account System Essential
The CAP Chairman called upon the government to introduce a Dubai-style Escrow Account System for real estate projects in Pakistan.
He said that when a consumer purchases an apartment, house, bungalow, shop or any other property, the money paid by the buyer should not go directly into the builder’s account. Instead, it should be deposited into a regulated Escrow Account under the supervision of an authorised government or regulatory institution.
He said payments should subsequently be released to the developer in stages and strictly according to independently verified construction progress. This would protect the buyer’s money while ensuring that the developer remains financially committed to completing the project according to the approved schedule.
Kaukab Iqbal also called for the establishment of a Centralised Digital Real Estate Registry containing complete and updated information about approved projects, developers, land ownership, NOCs, approval numbers, construction progress and expected completion dates.
He said this information should be easily accessible to the public through an online portal, enabling both Pakistani citizens and overseas Pakistanis to verify the legal status of a project before investing their money.
He further demanded that a public record and blacklist of developers violating consumer and regulatory laws be maintained. Developers who cause financial losses to consumers, abandon projects or repeatedly violate legal requirements should face substantial penalties, legal proceedings and, where warranted, restrictions on launching new projects.
Kaukab Iqbal said that where a project fails to meet its approved completion schedule, consumers should have a clear legal right to refunds, compensation and other appropriate remedies. A dedicated consumer real estate dispute-resolution mechanism or fast-track tribunal should also be established so that affected citizens are not forced to spend years pursuing their claims through lengthy legal proceedings.
He said that before approving major real estate projects, the competent authorities should conduct due diligence regarding the developer’s legal status, land ownership rights, financial capacity and track record of previous projects. Buyers must also be provided, before booking, with complete written information regarding the project’s legal approvals, total price, payment schedule, construction timeline, expected possession date and all terms and conditions.
Kaukab Iqbal particularly stressed the need to protect overseas Pakistanis who invest in the country’s real estate sector. He said they should be provided with a transparent online system through which they can independently verify a project’s approvals, land ownership, NOC, developer status and construction progress instead of relying solely on agents or representatives.
The CAP Chairman made it clear that Consumers Association of Pakistan is not against construction or the real estate business; it is against non-transparent, unapproved and potentially harmful practices that put consumers’ hard-earned money at risk.
He said developers who comply with all legal requirements and operate transparently should be facilitated and encouraged by the government. However, those who collect money from the public through unapproved, unclear or questionable projects must face strict and impartial action.
Kaukab Iqbal urged the government to make the principle of “First verify the land and approvals, then announce the project, then advertise and accept bookings — while keeping the buyer’s money protected in an Escrow Account” an integral part of the law.
“Citizens’ lifelong savings cannot be left at the mercy of irresponsible or fraudulent builders. The government must act immediately to protect real estate consumers, restore public confidence and ensure that every property investment is transparent, lawful and secure.”