Last year, the union government approved amendments to the Real estate Regulatory Bill which was long pending. There have been controversies and mixed reactions about the bill. The bill also proposes to bring the ongoing projects under its ambit which many lobbies and sections of the real estate were not happy about. Urban Development Minister Venkiah Naidu expressed confidence that the Real Estate Bill will become a "reality" during the ongoing Budget session of parliament.
But what does the bill bring in new to the table?
We detail below few of the salient points of the Bill as under:
The ten foremost points of the Bill are being discussed as being passed by the union cabinet:
1. The Bill applies to the commercial and the residential buildings and developments.
2. According to the Bill, it is mandatory for any project to be registered with the concerned real estate regulator who will be entitled to oversee the project and settle disputes if any.
3. The bill which was earlier submitted by the previous government in power in 2013 but wasn’t passed in the Rajya Sabha aims to give a fillip to the confidence of the investors and rule out the unfair and illegal practices by the sector. The government led by the Prime Minister Mr. Narendra Modi decided to amend the bill.
4. The proposed bill undertakes to address the issues pertaining to the delays in the projects due to delayed approvals which left the buyers wait for longer periods and the developers went into higher debts.
5. The realtors feel that this bill will lead to more transparency in the sector and pave the way for more maturity in the sector.
6. One more issue that this bill redresses is the control of black money as the vendors are often paid partly in black money invoking corruption and in turn many emerging small businesses have to exit from business and also the middle class find it difficult to stay in such a market.
7. One of the key provisions of the bill makes it compulsory for the builders and developers to put aside 50 percent of the buyers’ money into an escrow account collected before the sales of the homes and use it for the construction of the projects.
8. The bill also proposes to regulate unfair practices like diverting funds and utilizing it for other projects or purposes which has been the cause of delayed projects in many cases.
9. These kinds of practices are against the buyer’s interest and also delays projects which are to be overlooked by the regulatory authority.
10. The proposed bill seeks to divert the flow of funds for the right purposes and imposes penalties including de-registration of projects and imposes other fines in case of default or breach of the provisions.
The critics opine that the common buyer and the market at large will benefit from this bill in the following ways:
As the regulatory authority will have all information about projects including the ongoing ones including that of the commercial sector the buyers will have genuine projects to buy from and the chances of getting deceived in the hands of unscrupulous developers are reduced. This bill will also cover the ongoing projects which have not received Completion Certificate thus protecting all the buyers of the current market.
Secondly, the developers wouldn’t be allowed to advertise or launch projects without the prior approval of the authorities which is also a healthy sign. The Bill has prohibited any sale of properties based on super areas and the developers are advised to advertise the carpet area of the apartments which is a definite protection for the consumers.
The bill proposes to bring extra transparency as the developers have to disclose layout plans, submit clearances, and name the contractor and the architect, engineer and other key men associated with the project. There are enough provisions in the bill to ensure that the projects are completed within time.
Apart from the protection, it provides to the consumers and the developers, the real estate regulatory bill proposes to ensure that black money transaction reduces and this saves the loss of the exchequer. Thus, this bill although not liked by many developers as it includes the commercial projects and the ongoing projects but it definitely goes to address the issues of the common buyer.
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