Indian reality sector is infamous for many issues such as lack of transparency, delay in completion of projects, unaccountability of promoters & developers & so no which eventually leads to unending litigation.
Due to its major revenue & employment generation capacity real estate sector is one of the major important industries of the economy. So to regulate this industry was the need of the hour.
Finally couple of days before Union Cabinet has approved amendments to the Real Estate( Regulation &Development ) bill 2013 & now it will go to the parliament for the approval before becoming the law.
Highlights of the bill :-
– Initially bill was restricted to the residential real estate projects but now commercial real estate projects also brought in its ambit.
– Every state & union territory will have to establish Real Estate Regulatory Authority (RERA).
– Duties & responsibilities of all the stake holders (i.e promoters / agents / buyers or customers) are clearly defined.
– In the duties & responsibilities of the promoters two important duties are categorically defined those are
A). Rectifying structural defects
B). Refund of money in case of delay of completion of project.
Real estate agents also have been made punishable for non-compliance of orders of regulatory authority. Basically, brokers who want to sell flats or plots in a particular project will now have to get registered with the regulator. Appellate Tribunals will also be set up under the proposed law.
Buyers can claim refund with interest and compensation if promoters fail to deliver projects in time. If rules are violated, projects will be de-registered and penalties will be imposed on the developer. Infact builders often demand part payment in cash, making many ordinary buyers party to corruption.
– Promoters will have to register there all projects with Real Estate Regulatory Authority. Without registration they cannot offer it for sale.
– On registration promoters will have to upload project related all the details such as Layout plan; Land status; statutory approvals; schedule of project completion; names of architect, structural engineer contractor; names & address of real estate agents.
– It is mandatory for promoters to obtain permission of minimum 2/3 rd allot tees for making any kind of major alteration in the plan. However from the architectural view point & for the technical reasons minor changes are permitted.
– Another one of the important provisions is 50% (earlier provision was 70% ) amount collected from the buyers shall be deposited in separate bank account. This amount shall be utilized only for the construction of the project.
– All statutory permissions are to be obtained before the commencement of the project.
– For the grievances management & to expedite litigation pertaining to real estate projects every state shall establish Real Estate Tribunal of three members comprising chairman; one retired high court judge with one administrative/ technical member with sufficient amount of knowledge of the industry.
– This act is also applicable to the ongoing projects. However some clarity is required on some of the issues such as this clause. If ongoing projects brought in its ambit then work should be stopped till registration of these projects with RERA.
– Bill also enacts punishments of imprisonment ,fines to the directors, adamant builders to the extent of de registration of the projects for not complying with the orders of the tribunal.
To the large extent these provisions will help to bring transparency in the construction business. Its implementation will certainly boost growth in the real estate sector but in the initial stage of its implementation it may cause some delay due to project registration with RERA; government delays however needless to state here that still this delay is welcome .