Real estate lawyers hard hit by economic crisis
Chennai: The heady days of the real estate boom are over for most lawyers who made quite a packet dealing with clients on the lookout for purchasing land, with most of them having to deal with petty cases now -- a fallout of the recession brought about by the global economic crisis.
"Earnings have come down for these lawyers, who specifically concentrated only in dealing with real estate clients. Some of
them have even started taking up pending cases," Madras High
Court Association president R C Paul Kanakaraj said.
The affected lawyers, once considered an `elite group` among
their peers across courts in the state during the peak period
of the real estate boom are no longer the envy of their
Noted civil advocate C Ravindran said four years back, a
lawyer used to charge clients who wished to register land,
about one percent of the total land value. "The lawyers`
commission percentage has slowly come down and is now a mere
0.5 percent" he says.
Compounding their woes is the increase in the number of
lawyers who have chosen to enter this sector despite the bleak
prospects and a leap in those entering the legal profession,
forcing many real estate lawyers to quit their vocation
altogether, he said.
These lawyers used to verify the land document for clients
wanting to purchase a house or flat, then go through the
registration process and charge a certain amount for these
An advocate, on condition of anonymity, recalled that he
used to charge a minimum of Rs 10,000 per client, who came with
documents for legal verification and other formalities and
that he used to deal with a minimum of 10 clients a month. "Now
the scenario is totally changed. Due to the economic crisis
and the fall in real estate business, I am not making any
money at all," he rued.
Confederation of Real Estate Association president Prakash
Chella said the sector had seen a definite slowdown in the
last one and a half years. "The slowdown was at its peak
during 2008. We are hopeful that the market will soon return
to normal," he said.
Sources at the Commercial taxes and Registration department
said the financial meltdown had resulted in a 3 percent dip
in revenue collection for the Tamil Nadu revenue department in
2008-09, based on land documents registered, compared to the
same period last year. Revenue collection for 2008-09 was
Rs 4,099.54 crore, compared to Rs 4,232.36 crore in 2007-08, a
negative rate of 3.14 percent.
This was in stark contrast to the scenario in 2006-07, when
revenue collection figures shot up by 45 percent over the
same period in 2005, when the business was at its zenith.
In 2006-07, the revenue department collected Rs 3,407.50
crore as registration fee, compared to 2,384.64 crore the
Registration of documents also showed a 23 percent growth
rate - 24,92,294 documents were registered in 2006-07, against
20,11,566 registered in 2005-06.
Most of the lawyers now fervently hope that the gloomy
economic scenario will soon be a thing of the past and the
real estate business will start looking up again, which would
see a change in their fortunes.
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