As a relief to house-buyers, the much-awaited Real Estate (Regulation and Development) Bill 2015 has been passed in the Rajya Sabha. This Bill seeks to bring in transparency and protect consumer interests in the realty sector.
Urban Development Minister M Venkaiah Naidu said, "It aims to protect the interests of buyers and bring more transparency in the sector."
He further added that there would be no discrimination of any kind on basis of religion, region, caste, creed and gender in the rules implied.
Here is what home-buyers and real estate agents need to know about the Bill:
1. The bill defines carpet area as net usable area of an apartment: This means that now, you will be charged only for the carpet area of your apartment and not the other areas which include the walls, lift and garden.
2. Municipal bodies and government bodies are not included in the Bill.
3. A minimum of 70% collections from home-buyers should be deposited in separate pass through account called the escrow account which is to be used to cover cost of construction and land.
4. The bill would prohibit unaccounted money from being pumped into the sector and as now 70% of the money has to be deposited in bank accounts through cheques.
5. A state-level Real Estate Regulatory Authorities (RERAs) will be established to regulate transactions of both residential and commercial projects. This is being done to accelerate completion and handing over of the projects.
6. Appellate Tribunals will now be required to adjudicate cases in 60 days as against the earlier provision of 90 days.
7. Regulatory Authorities to dispose of complaints in 60 days while no time frame was indicated in earlier Bill.
8. Misleading advertisements will be made punishable offence where the first-time offenders will be fined 10% of project cost and repetitive offenders could face jail term.
9. The Bill provides for imprisonment of up to three years in case of promoters and up to one year in case of real estate agents and buyers for any violation of orders of Appellate Tribunals or monetary penalties or both.
10. The developers are required to disclose project information including details of the promoter project, lay-out plan, land status, status of approvals, agreements along with details of real estate agents, contractors, architects, structural engineers.
Naidu mentioned that the consumer shall be the king and when there is a king, there got to be a queen also. The queen obviously is the developer. And there shall be a happy marriage between the king and the queen, for both to live happily ever after.
Stated as the second largest employer in India, real estate sector accounts for about 9% of GDP.
With this Bill, Modi government wishes to renew investors' confidence and ensure timely completion of projects and in this way help in achieving the target of 'Housing For All' scheme.