Buying a new house will be less of an ordeal, provided the Real Estate (Regulation and Development) Bill 2013 becomes law. After a long gestation, the Bill was cleared by the Union cabinet on June 4. The Bill seeks to set up a regulatory framework to protect the interests of home buyers, ensure fair practices in the sector and ensure accountability of developers. It also aims to create a grievance redressal mechanism for home buyers.

The Bill, a draft of which was made public back in 2011, in its current form applies to the residential segment only and has a lot of customer-friendly measures. The previous version of the draft Bill governed the commercial segment as well.

The Bill requires the setting up of at least one regulator in each state and union territory. All housing projects with a plot area of 4,000 square metres or more will have to be registered with the regulator after submission of necessary clearances before starting construction.

"This clause is expected to impact developers in all major cities, except in Mumbai, where the Bill will have limited impact due to smaller plot sizes," according to a Crisil analysis report.

Developers will have to share details of residential projects such as layout plans, carpet areas of apartments, facilities/amenities and development plans. These project specifications will be accessible on websites of the proposed regulators. Developers will also have to price their properties based on the standardised carpet area, which includes the actual usable space available.

Developers will also be liable to punishment for misleading advertisements. They will also have to adhere to construction time lines. In case of delays, builders will have to refund money with interest to buyers. According to the Bill, developers will have to deposit a portion (70% or the portion notified by the appropriate government) of the money raised for each project in a separate escrow account and utilise it only for that project.

Property brokers have also been sought to be covered under the proposed regulatory mechanism. The Bill mandates registration of real estate agents with the regulatory authority.

Though most property analysts find the proposed legislation a positive step, it has received mixed reaction from developers. Many of them say it will make doing business difficult and push up property prices.

"Though the Bill will turn out to be a boon for buyers, it has received a lot of criticism from developers for not being inclusive in its approach towards them. The Bill, in its current form, does not provide any relief to them in terms of getting through the cumbersome approvals and permissions process in an expeditious manner," according to Anuj Puri, chairman and country head, Jones Lang LaSalle India, a property advisory.