NEW DELHI: A bill seeking to regulate the real estate sector, bring in transparency and help protect consumer interests was passed by the Rajya Sabha today. Moving The Real Estate (Regulation and Development) Bill, 2013 for consideration and passage, Urban Development Minister M Venkaiah Naidu said it aims to protect the interests of buyers and bring more transparency in the sector.
The bill would prohibit unaccounted money from being pumped into the sector and as now 70 per cent of the money has to be deposited in bank accounts through cheques. There has to be single window clearance for all approvals.”
The Bill also 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.
It proposes a minimum of 70 per cent collections from buyers should be deposited in separate escrow account to cover cost of construction and land.
It will help establish state level Real Estate Regulatory Authorities (RERAs) to regulate transactions related to both residential and commercial projects and ensure their timely completion and handover.
Appellate Tribunals will now be required to adjudicate cases in 60 days as against the earlier provision of 90 days and Regulatory Authorities to dispose of complaints in 60 days .
Real Estate Regulator Bill: 10 things you should know about it
1) It establishes the State Real Estate Regulatory Authority for that particular state as the government body to be approached for redressal of grievances against any builder. This will happen once every state ratifies this Act and establishes a state authority on the lines set up in the law.
2) This law vests authority on the real estate regulator to govern both residential and commercial real estate transactions.
3) This Act obliges the developer to park 70% of the project funds in a dedicated bank account. This will ensure that developers are not able to invest in numerous new projects with the proceeds of the booking money for one project, thus delaying completion and handover to consumers.
4) This law makes it mandatory for developers to post all information on issues such as project plan, layout, government approvals, land title status, sub contractors to the project, schedule for completion with the State Real Estate Regulatory Authority (RERA) and then in effect pass this information on to the consumers.
5) The current practice of selling on the basis of ambiguous super builtup area for a real estate project will come to a stop as this law makes it illegal. Carpet area has been clearly defined in the law.
6) Currently, if a project is delayed, then the developer does not suffer in any way. Now, the law ensures that any delay in project completion will make the developer liable to pay the same interest as the EMI being paid by the consumer to the bank back to the consumer.
7) The maximum jail term for a developer who violates the order of the appellate tribunal of the RERA is three years with or without a fine.
8) The buyer can contact the developer in writing within one year of taking possession to demand after sales service if any deficiency in the project is noticed.
9) The developer cannot make any changes to the plan that had been sold without the written consent of the buyer. This puts paid to a common and unpopular practice by developers to increase the cost of projects.
10) Lastly, every project measuring more than 500 square metres or more than eight apartments will have to be registered with the RERA
News Courtesy : Economic Times