The state level regulatory authorities called the Real Estate Regulatory Authorities (RERAs) will mandate registration of all real estate projects, with some exceptions, with it. Real estate agents dealing in these projects will also be asked to register with RERAs. The details of the project including the site and layout plan, and schedule for completion, etc will all be made available in the RERA website itself. The Bill also ensures that the promoters will have to set aside 70 per cent of the amount collected from buyers for a project in a separate bank account to be used exclusively for the construction of that project.
It also talks about the establishment of state level appellate tribunals to handle complaints regarding RERA decisions.
One of the key fallouts of cleansing the real estate market will be the increase in white money transactions in the sector. The cost of the project will also go up, but that is a welcome expense that can be taken for the peace of mind it offers to the customer.
Since 'land' is a state subject, the Central legislation may not cover the entire aspects of real estate regulation. It is for the states to see that the regulation becomes fool proof.
The idea of an authority to regulate real estate transactions have been in existence for many years now. Some state governments have even framed some laws to streamline real estate transactions. The Central law will prevail over the existing laws in case of differences.
In fact, in a landmark judgement, the Competition Commission of India had termed the absence of a real estate regulator as a major cause of consumer grievances in the sector.
The genesis of the current Bill can be traced to the Model Real Estate Regulation and Development Bill drafted by the Ministry of Housing and Urban Poverty Alleviation in 2009. The Model Bill provided a legislative framework that state governments could choose to adopt while enacting their own laws.