The Rajya Sabha has finally passed the landmark Real Estate Bill yesterday keeping in mind the interests of home buyers and home developers equally to combat corruption and lastly inefficiency. Union Minister of Urban development Venkaiah Naidu calls the bill a milestone which will make consumer the king.
- Real estate sector contributes 9% to the national GDP (Gross Domestic Product) and that is why the passing of the Bill was seen as a very important step towards having a better regulatory system as well as systematic growth in the industry. Consumers in the country have complained regularly regarding unfair practices that came up in real estate businesses due to absence of any regulatory mechanism.
- The first draft of the Bill was rejected last year by the Rajya Sabha stating that it did not serve the purpose of helping consumers. The previous draft totally left out constructions below 1,000 sq mt or 12 apartments from the accountability sphere but the newly passed bill has reduced the size and has exempted projects below 500 sq mt.
- However, one of the most significant aspects of the Bill is the definition of “carpet area”. So homebuyers will now pay only for the carpet area. At the same time, real estate developers will from now on have to seek permission from 66% of the consumers in case they need to increase the number of floors in a building or change building decorum. This move thus will ensure consumers safety from any ad-hoc changes.
- Also, another significant feature of the Bill is that from now on all the projects will have to be registered with regulatory authorities and developers will need to disclose all the information regarding a project like details of the promoter, project, layout plan, land status, approval status, architects, engineers and other agreements. In addition to this, house developers will have to provide details of projects launched and under-construction of last five years as well as current status of those projects.
- There also will not be any discrimination based on religion, region, caste, creed, sex and gender etc. “Non-discriminatory” clause may soon come into force as well. Builders will have to simultaneously deposit a minimum 70% of collection from buyers to cover the cost of construction and land. Any promotional pre-launch of any building/flat will not be allowed unless it gets the required approvals from local authority. Also, all the incomplete projects will come under the regulation as well.
- The Bill also has stated that a builder has to return the total payment including interest to consumers who have been affected by any incorrect or falsify statements or work. If any builder cause any delay in transferring properties to buyers, the regulatory committee or tribunal will intervene and fine builders within 60 days. Also, in worst case scenario, tribunal can send any developer to prison for three years over fraudulence. This Bill will only help in achieving the government’s target of ‘Housing For All”.