REAL ESTATE BILL MAKES IT THROUGH RAJYA SABHA
In what could finally turn out to become a reality for the existing and future homebuyers of India, the upper house of the parliament today has given a green signal to the much awaited Real Estate Regulatory Authority bill. The stage is now all set with the ball in Lok Sabha’s court to put a final stamp on the bill. With a few important changes made in the amendments, the Rajya Sabha has passed the bill with Lok Sabha to give it a final go ahead. This news is itself extremely important for all; buyers, developers and the realty sector as well which has been long reeling under the heavy burden of misconduct.
Key Highlights of the Bill
Following points will help us to understand how the Real Estate Bill helps the property buyers, developers and the sector:
- Each state will get a real estate regulator who will help in settlement and imposition of compensation. All residential and commercial projects will have to compulsorily be registered with the regulator so that buyers can have access to valid projects. Even the ongoing projects that have not received the completion certificate will be covered.
- Without a prior registration with the real estate authority, developers cannot advertise or launch projects.
- Developers will have to sell property on the basis of carpet area and not super area.
- In order to ensure transparency about the projects, developers will have to disclose layout plans, submit clearances and name the associates, architect, contractor and others with the regulator.
- For timely completion of the projects, promoters will have to deposit 70 percent of the amounts realised from the buyers in a separate bank account within 15 days, for construction purposes. Consent of two-third buyers will be required to alter plans, structural designs and specifications of the building. In this case, each buyer, no matter how many properties they hold in one project, will be counted as one vote only. Developers will be responsible to rectify structural defects and refund money in cases of default.
- Brokers will also have to be registered with the real estate regulator; non-compliance of which will be punishable.
- Developers will have to deliver projects on the promised date mentioned by them. In case of failure of timely delivery of projects, the buyers can claim refund with interest and compensation.
- In cases of violation of rules by the developers, projects will be de-registered and attract heavy penalties. Non-compliance will invite fine up to 10 percent of project cost and misinformation will cause a fine of 5 percent of project cost. Meanwhile, the fine for the agents is Rs. 10,000 for each day during the tenure of violation of provisions.
- The loss in taxable income caused by builders asking the buyers to pay certain amount in cash will now be curbed, thus eradicating corruption.
- The bill will regulate both, residential and commercial projects.
Mr. Kushagr Ansal, Director, Ansal Housing
We are now just one step away from receiving probably the biggest news for the real estate sector with Lok Sabha to give a final word on it. Developers will now have to park 70 percent of the amount collected from the buyers of the project in a separate bank account. Also, marketing and selling of the projects will be based on carpet area basis and not super area basis, thus justifying the amount which the buyers pay for a property.
Mr. Vikas Bhasin, MD, Saya Group
This news has come out as a huge relief for the existing and future homebuyers of this sector. It is now just a matter of approval from the lower house that RERA will become a reality for the country’s realty sector. With the new amendments in place, even the existing projects will be counted in for justice. The market sentiments will now witness a huge boost and gradually the demand for housing in the country will pick up pace.
Mr. Rakesh Yadav, Chairman, Antriksh India
The era of buyers in the real estate sector has finally come. This bill was making rounds in the previous two parliament sessions and has now reached on the final step. With the Lok Sabha to give a final word on the same, there will then be a sudden filtration process which will become visible where all the dishonest players in the sector will become eradicated. This will act as a perfect relief provider for the potential buyers who will now be able to blindly trust this sector.
Mr. Ankit Aggarwal, CMD, Devika Group
This bill is aimed at protecting the interests of consumers, and also seeks to promote fair play in real estate transactions and ensuring timely execution of projects. These amendments will bring the much needed transparency in the sector as well as attract FDI in the long run. With the real estate bill in place, every builder and even the brokers will have to register. Without the consent of buyers, no alterations can be made in the structural plans. We now await the decision of Lok Sabha, which has to put a final word on it.
Mr. Ashok Gupta, CMD, Ajnara India Ltd.
It is very imperative to understand that the demand and respect of real estate sector has been moving downward for several years now attributing to the negatives pertaining in this sector such as fraud committed by several builders, possession delays and absence of a monitoring body, and this will continue if proper action is not taken. With this bill in place, every state will have a regulator who will be continuously supervising and monitoring. Moreover, the projects will now be completed on time and developers will have to submit all the layouts, plans and documents with the regulator who will ensure transparency and hence, customers will feel more secure while transacting.
Mr. Deepak Kapoor, President CREDAI-Western U.P. & Director, Gulshan Homz
The buyers of property market in particular were waiting for this news to come out which guarantees safeguarding of their rights and interests. Lok Sabha is still to approve on the bill, which looks more like a formality looking at the majority the government has there. Once RERA becomes a reality, the buyer’s fraternity will be overjoyed and the much needed justice will be finally served. For long has this sector and its buyers being affected, but with RERA in place, there will a regulator in every state who will monitor all the transactions and have answers for the grievances. The amendments are fair which will now pave way for a better demand and supply in the sector.