The Cabinet Division perhaps one of the most powerful agencies of the Federal Government, right under the supervision of the Prime Minister himself is dissociating itself from a housing society which is named after it. The Cabinet Division Housing Society disclaimer clearly states that there is absolutely no connection between the said housing society and the “Cabinet Division Employees Cooperative Housing Society” in any way, whatsoever.
the Cabinet Division does not have any administrative, financial, legal, practical or any other kind of association/affiliation with the concerned housing society or any other housing society.”
Official disclaimer by Cabinet Division
The importance of this disclaimer lies well beyond that of a single housing scheme. The message that goes out to all Pakistani real estate investors is that just because the name of a government department appears in the name of the housing society, it doesn’t mean anything.
What was wrong with the Housing Society
There is a clear example of misrepresentation in the disclaimer of the Cabinet Division housing society. The “Cabinet Division Employees Cooperative Housing Society” makes use of the term “Cabinet Division,” which leads to the creation of a misconception that the housing society is:
- Owned and operated by the Cabinet Division
- Operating under the umbrella of the federal government
- Associated in any way with the Government of Pakistan
None of these implications is correct. This has been clearly stated by the Cabinet Division. However, the very name of the company, which has been created to reflect these implications, had been in use for some time prior to this statement.
A Tradition That Has Remained Untouched for Years
The disclaimer by the Cabinet Division housing society is far from being a rare occurrence. It throws light on a tradition that has been prevailing in the Pakistani property market for decades and which has reportedly affected billions of rupees worth of investments.
The names of housing societies in Pakistan have included:
- Federal ministries and divisions
- Government departments and autonomous bodies
- Constitutional bodies
- Law enforcement agencies
- Public sector organizations
- Judicial organizations
For average investors and individuals, these names have provided strong subconscious assurances. A housing plan that is related to any government institution is obviously considered safe and responsible, and not prone to vanish with the invested money as compared to a privately-named housing scheme. This perception has been exploited in Pakistan. It has cost Pakistani investors heavily.
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Fraud in the Background of the Housing Industry in Pakistan
The disclaimer of the Cabinet Division Housing Society comes at a time when millions of rupees have been lost by investors in the cooperative housing industry of Pakistan. This has been an unfortunate trend:
- Thousands of people invest money in housing projects
- The project gets affected by fraud, illegal dealings, or double selling of the same plot
- Unauthorized constructions take place without any permission
- Litigations take years to be settled
- No possession is ever taken
The use of government titles exacerbates the damage through the targeting of investors that, understandably through the use of such a title, hold the belief that there is some form of government supervision of their investment. This betrayal is worsened when the investor discovers that the deception led to this belief.
Legal Void Created By This Disclaimer
This disclaimer raised an issue which some legal experts have always been saying that the regulatory regime of Pakistan has failed to resolve: whether the cooperative societies or private organizations can be allowed to give names to themselves using names of constitutional and governmental institutions such that the people think they are government approved institutions?
The existing laws do not explicitly ban the practice. Cooperative societies have been incorporated under the laws of cooperative societies acts of respective provinces. The private housing societies have been incorporated under various laws of property and companies. There are no explicit prohibitory provisions of these laws against the use of the name of a government institution for business gains.
Legal analysts believe that there is an urgent need to look into whether the existing laws govern the names associated with the government institutions and whether the existing names of housing societies need to change.
What Needs to Change
Cabinet Division Housing Society disclaimer is a warning to the public — but a warning does not constitute a solution. There are three key changes which need to be made to solve this issue:
- Legislative prohibition: alter laws relating to cooperative societies and housing schemes to state that the names of government institutions cannot be used without proper authorization and disclaimer
- Disclosure requirements: impose mandatory disclosure on existing housing societies using the names of government institutions in all their promotional and communication activities
- Regulator’s message to investors: SECP and other regulators need to convey to the investors that the name of a government institution has no legal or regulatory protection when part of housing society title
Nayab Fatima is a media professional specializing in fact-based journalism, research, and analytical reporting on technology, telecom, aviation, and automobiles.
