Cabinet approves game changer real estate regulation bill -Governance Now

Cabinet approves game changer real estate regulation bill

A regulator for the real estate market which has been dogged by delays, non-transparent deals and harassment of consumers

GN Bureau | April 8, 2015

#real estate #builders #developers #consumers #housing projects

The Real Estate (Regulation and Development) Bill, 2013 is being called the game changer and seeks to protect the interest of consumers from errant developers and ensure timely execution of projects. The union cabinet has approved changes to a bill that seeks to regulate the country's property market, which has been weighed down by black money, title problems, delay in projects and harassment of consumers.

The important changes to the original legislation of 2013 are (1) from 70 percent of the buyer's investment being put into an escrow account, the amount is reduced to 50 percent, (2) to bring the commercial segment of the real estate sector within the ambit of the bill apart from the residential segment and (3) a condition that prohibits a developer from changing the plan in a project unless 2/3rd of the allottees have agreed for such a change.

The Bill provides for mandatory registration of all projects and real estate agents who intend to sell any plot, apartment or building with the Real Estate Regulatory Authority. It makes mandatory the disclosure of all information for registered projects like details of promoters, layout plan, land status, schedule of execution and status of various approvals. The Bill also seeks to enforce the contract between the developer and buyer and a fast track mechanism to settle disputes.

The government said the Bill is expected ensure greater accountability towards consumers, and to significantly reduce frauds and delays. It said the proposed legislation is expected to promote regulated and orderly growth of the real estate sector through efficiency, professionalism and standardization.

Other points of the bill that consumers are:

Real estate regulator set up in all states. All projects will have to be compulsorily registered with the regulator. The real estate regulator will settle disputes and award compensation.
Promoters have to disclose layout plans and clearances details to the regulator along with the names of the contractor, architect, structural engineer and others associated with the project.
Developers will have to rectify structural defects and refund money in cases of default.
Brokers for the projects have to get registered with the real estate regulator.
Buyers can claim refund with interest and compensation if promoters fail to deliver projects in time.
Violation of rules will attract de-registration of projects and imposition of penalties.

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