The Union Cabinet recently approved the ReEstate (Regulation and Development Bill) which will address a long-standing demand to bring in a regulator for the real estate sector.
Real Estate (Regulation and Development) Bill:
- The Real Estate (Regulation & Development) Bill seeks to protect the interests of consumers and establish regulatory bodies at the Centre and States for ethical and transparent business practices in the real estate sector.
Aim of the Bill: The bill aims at regulating contracts and transfer of property, both of which are under concurrent list. The bill will override the provisions of state real estate laws if found inconsistent.
Features of the bill:
- The Bill regulates transactions between buyers and promoters of residential real estate projects. It establishes state level regulatory authorities called Real Estate Regulatory Authorities (RERAs).
- Residential real estate projects, with some exceptions, need to be registered with RERAs. Promoters cannot book or offer these projects for sale without registering them. Real estate agents dealing in these projects also need to register with RERAs.
- 50% of the amount collected from buyers for a project must be maintained in a separate bank account and must only be used for construction of that project. In the original Bill, 70% of the amount had to be kept for this construction.
- The Bill establishes state level tribunals called Real Estate Appellate Tribunals. Decisions of RERAs can be appealed in these tribunals.
- 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 includes 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.
Benefits:
- The Bill is expected ensure greater accountability towards consumers, and to significantly reduce frauds and delays.
- It is expected to promote regulated and orderly growth of the real estate sector through efficiency, professionalism and standardization.
- These measures are also expected to boost domestic and foreign investment in the sector and help achieve the objective of the Government of India to provide ‘Housing for All by 2022’, through enhanced private participation.
Source: prsindia.org , Sandesh.com
