Cheer for home buyers! After Rajya Sabha, real estate regulatory bill cleared by Lok Sabha as well

NEW DELHI: The Lok Sabha today cleared the Real Estate (Regulation and Development) bill which seeks to set up a regulatory mechanism for the real estate sector to protect the rights of home buyers by ensuring timely delivery by builders and providing options for recourse if there is a delay.

The bill was passed by the Rajya Sabha on March 10 after remaining pending since 2013.

After the bill was passed by the Lok Sabha, urban development minister Venkaiah Naidu tweeted: “Extremely happy that the Parliament cleared #RERABill, much awaited legislation in the Housing Sector.”

“I did my duty. States are given Power. Now States should follow it up with timely approvals… #RERABill.”

“Single window approval system is being developed for ensuring timely completion of housing projects #RERABill.”

Leader of opposition in Lok Sabha Mallikarjun Kharge said in the lower house that his party wants to pass the bill.

Under the provisions of the bill, builders cannot advertise and sell homes till all approvals are in place and the project is registered with the regulatory authority that will be set up in every state, alongside appellate tribunals for dispute resolution. Even ongoing projects will have to register with the authority.

At the time of the registration, the developer will have to disclose all project information including details of promoter, project plans, including implementation schedule, land status, layout plan, status of approvals, agreements, details of real estate agents, among many others, empowering buyers.

Home buyers will also now be able to buy homes knowing the carpet area of the apartment rather than being sold based on the super built up area.

Also both consumers and developers will now have to pay same interest rate for any delays on their part.

The bill also mandates that builders deposit 70% of money collected from buyers into a separate account that will be utilized only for construction and payment for land, ensuring that money collected is not diverted to other projects or uses as has been the case with many builders in the past.

With both the houses of the parliament clearing the bill, it will now be sent for approval to the President of India post which it will become a law. The government will first notify sections of the bill which deal with setting up of the regulatory authority, which is to be created within one year. After that other sections dealing with registration of real estate projects and real estate agents and functions and duties of promoters will be notified.

The bill was necessitated by the massive delays in projects that home buyers have been facing over the last few years. Many buyers have been agitating against builders because of the delays as well as the one-sided nature of their contracts with builders.

Source: Economic Times
Dated: 16th March 2016

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