Real Estate (Regulatory and Development) Bill Gets Rajya Sabha Approval
The Rajya Sabha gave its much-needed approval to the Real Estate (Regulatory and Development) bill. An industry, which is known for its delayed projects, shoddy constructions, escalating costs and no time for redresses, the real estate is one such field where investors and buyers are always in confusion regarding their plots, flat purchases and agreements.
[USPRwire, Thu Mar 30 2017] The Rajya Sabha gave its much-needed approval to the Real Estate (Regulatory and Development) bill. An industry, which is known for its delayed projects, shoddy constructions, escalating costs and no time for redresses, the real estate is one such field where investors and buyers are always in confusion regarding their plots, flat purchases and agreements.
After the approval of the RajyaSabha, the bill is going to travel to the LokSabha and finally for the Presidential consent before becoming a law, as per the norm, which is expected to be a smooth journey. The Bill will reinforce clean-up of delayed projects and will bar developers from advertising and selling homes in project without prior approvals from the local authorities.
The new Bill has the following salient features:
•All projects have to be registered with regulators set up in every state alongside appellate tribunals for dispute resolution.
•Even the on going over 17,000 projects need to be registered with the authority.
•All details regarding the project such as the plans, land status, approvals,promoter details, implementation schedule, layouts and approvals need to be disclosed , thus empowering the buyers with information they need to know.
•The builders are required to deposit 70% of buyers’ money in an escrow account that will be utilized for construction and payments for the land. This is an attempt to put an end to diversification of funds to other projects.
•The homes need to be advertised and sold based on carpet area information; not the super area. The term carpet area will eliminate any wrongdoing.
•The developer needs to pay the same penalty interest rate as the buyer does for the project delay.
The Bill comes at a strategic time when the real estate market is worst hit and buyers are shying away frominvesting any amount in the market, due to delayed projects, high property prices, shoddy constructions, misleading project details and higher interest rates. To bring the situation under control, the Bill says that all the project on a land more than 500 sq.mtrs or having weight apartments in them need to be registered with the concerned authorities. Moreover, with the clear carpet area mention, the buyers can be sure of the usable area available to them. This will ease the tensions of lacs of real estate investors in Mumbai and other metropolitan cities where the rates of properties are sky high and so are the mention of their super area projects.
Urban Development minister, Venkaiah Naidu said in the RajyaSabha that the real estate sector, which houses over 76,000 companies, urgently needs a regulator, just like the telecom industry has. He also added that the consumer needs to be the king. A regulatory mechanism will ensure that a sound infrastructure framework is in place for the real estate sector.
The Bill is expected to be listed in the LokSabha on Monday. Rahul Gandhi, vice president of the opposition party Congress had assured earlier this week to the buyers that the Bill will have his support.
The CREDAI (Confederation of Real estate Developers’ Association of India) said that the Bill is most welcome but said that including on going projects under the legislation would mean to stop the wok and ensure compliance with the legislation.
The Bill is expected to bring all the real estate projects in Delhi, Hyderabad, Mumbai, Kolkata and other fast growing cities under the scanner and release the delayed projects.
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