All you need to know about 'The Real Estate Bill'!

All you need to know about 'The Real Estate Bill'!

This is a much awaited step, which will now definitely boost the sentiments of both buyers and developers.

  • New Delhi,  March 11, 2016  
  • |  
  • UPDATED   14:29 IST

To regulate the real estate sector, the Rajya Sabha, passed The Real Estate Bill on Thursday. This is a much awaited step, which will now definitely boost the sentiments of both buyers and developers in the real estate sector which have been lacking transparency for many years. But many of us are still confused what exactly is the real estate bill all about...So, just read on few key points to know about the real estate bill in details...

  • Buyers will now have to pay only for the carpet area and not the super built-up area which was loaded with confusion earlier.
  • The Bill will help in establishing state level Real estate Regulatory Authorities (RERAs)  to regulate transactions related to both residential and commercial projects and ensure their timely completion and handover.
  • The developers will now have to take consent of 66% of the home buyers in case they have to increase the number of floors or change the building plans. This will protect the buyers from any ad-hoc changes that are a rule presently.
  • 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 while no time frame was indicated in earlier Bill.
  • The Bill provides 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.
  • Now, minimum of 70 per cent collections from buyers should be deposited in separate escrow account to cover cost of construction and land. This is a big relief for home buyers as developers usually use gather money from one project to fund the other.
  • The Buyers will be mandated to register their projects and agents with the regulator in their area.
  • The Bill has introduced a mandatory disclosure of projects, which includes details of the promoter, project, land status, clearances, approvals, etc. to increase the credibility of developers and protect consumer rights as well.
  • Also, both buyers and developers will pay the same rate of interest in case the buyer delays payment or the developer delays giving possession. Earlier, the Buyer-Seller Agreements were heavily tilted towards the developers who used to pay very little penalty in case of delay in giving possession.
  • The Bill has introduced an insurance of the land title. This insurance is to benefit consumers if the land titles are found to be defective.
  • Now,  for any structural defects in the property the period is increased from 2 to 5 years for the developers to be held responsible. Developers will not be able to change the plans without the permission of two-third buyers. Home buyers just have to inform the developer of the problems within one year of the purchase. 

Views from real estate experts:

Sanjay Dutt, Managing Director, India, Cushman & Wakefield says-" This Bill is bound to bring about the much needed relief for the home buyers in India who are still struggling to put a roof above their heads. The Bill aims to bring in transparency in the real estate sector, thereby, encouraging investments from foreign and domestic financial institutions and protecting the interest of the home buyers."

Anuj Puri, Chairman and Country Head, JLL India, "A single-window clearance is needed now, without which there may be cases where bona-fide delays by developers may still result in an unfavourable penalty. The time taken to get many environmental, state-level and municipal-level clearances have afflicted developers for long. Without ensuring that the approval process is not delayed by civic agencies' inaction or setting up a single-window system, the regulator may inadvertently add another layer to the longer processes already delaying projects."

We hope, the scenario of the real estate sector will change and will bring back the investors' confidence. Also, we look forward to builders to ensure the completion of projects timely and bring more and more new opportunities for the buyers in the real estate markets. All we can say that 'Housing for all' is not a dream anymore.