Enhancing Real Estate Risk Management Through Structured JV Frameworks and Data Compliance
Dimple Merchant, Partner at I. Merchant and Company, highlights the need for stronger governance structures, data protection compliance, and faster approvals to address risks in real estate projects and improve sector efficiency.
As private equity participation in real estate grows, joint venture structures between developers and investors are becoming more complex and require stronger governance frameworks, according to Dimple Merchant, Partner at I. Merchant and Company. In an interaction with ETRealty, she said that traditional joint venture documentation is no longer sufficient, with increasing emphasis on clearly defined financial structures such as cash flow mechanisms, waterfall models, and risk-sharing arrangements. She added that compliance with emerging regulations, including environmental, social, and governance (ESG) norms and data protection requirements, is also becoming integral to project structuring.
Merchant noted that delays in real estate projects can be mitigated through stronger oversight mechanisms, including clearly defined compliance checklists, audit systems, and well-structured vendor contracts. She emphasised that contractual safeguards such as indemnities and penalty clauses are critical in managing execution risks, particularly in multi-stakeholder developments.
On the issue of data privacy, she said the growing use of digital systems in residential communities and redevelopment projects has made data protection a key concern. With increasing reliance on biometric systems, surveillance, and third-party service providers, she stressed the need for clear consent mechanisms and robust contractual frameworks to safeguard user data, in line with evolving regulatory requirements.
Merchant also highlighted challenges in the affordable housing segment, pointing to delays in approvals, funding cycles, and infrastructure readiness as key constraints. She said faster approvals, improved access to buyer financing, and stronger land title frameworks could help attract more private sector participation.
Reflecting on regulatory developments, she said the Real Estate (Regulation and Development) Act (RERA) has improved transparency and clarity for both developers and homebuyers, although there is scope for further refinement. On the Insolvency and Bankruptcy Code (IBC), she noted that the framework has helped balance the interests of developers and homebuyers in stressed projects, with adjudicating bodies taking a more calibrated approach.
