The Real Estate Regulation Bill, 2011 is aimed at regulating the country's real estate sector, providing protection to home buyers from the shenanigans of erring developers.
The much-awaited Real Estate Regulation Bill, 2011 is set to be placed before Parliament in its upcoming monsoon season. The Bill is aimed at regulating the country's real estate sector, providing protection to home buyers from the shenanigans of erring developers. More importantly, it is expected to usher in transparency into opaque real estate transactions.
"The draft is almost final now. It is a matter of just a few days to fine-tune it. After that it will be sent for ministerial consultations and Cabinet approval," a senior urban development ministry official. "We expect to present it to Parliament in the upcoming monsoon session," the official added.
The government had first proposed the Bill in 2007. The first draft of the Real Estate (Regulation of Development) Act was introduced in Parliament in September, 2009. The Bill was supposed to set the tone for housing reforms in the country.
Even though the ministry had assured that the Bill will be presented in Parliament by 2010, it failed to see the light of day amidst opposition from real estate developers who alleged that the Bill had certain provisions which would hamper the sector's growth.
For example, the earlier draft proposed to hold the developers responsible for project delays and had prescribed for stringent penalties in such cases. However, developers demanded bringing two vital stakeholders - government bodies and financial institutions - into the ambit of the Bill, and penalise them if the delays were caused by them.
"We have already included some of the changes and the recommendations suggested by all of the industry stakeholders, from buyers to developers to industry experts," said the ministry official.
"Also, certain clauses of the earlier draft have been amended, without ignoring the interest of the home buyers, which is the primary focus," the official added. The new draft has provisions that protect buyers from fly-bynight developers, false advertisements, mis-selling of projects and undue delay in project completion.
The Bill makes it compulsory to mention the actual carpet and built-up areas in advertisements. The Bill provides for heavy penalty if the developer is found guilty of cheating the buyers.
The Bill also provides for promoting housing for the urban poor by making it compulsory for developers to provide some portion of project townships for the lower income group. For the benefit of the developers, the Bill proposes to streamline the development clearances process. Developers cite this as the main reason for project delays.
The Bill has provisions aimed at preventing the hoarding of land by deep-pocketed realtors. In order to implement the Bill seamlessly in the states, the ministry will set up a consultative committee, which will have representatives of realty developers from various states.
Courtesy: Mail Today