Real Estate Bill gets Cabinet nod
REAL ESTATE BILL – 2015
Finally the Union Cabinet has cleared the Real Estate (Regulation and Development) Bill 2015, which was pending for a fairly long time. The next step is to get this bill passes in the Parliament. Signs are that it should go through without any further hold-up, as the government has included most of the suggestions made by others including Congress. Some of the clauses here should give the much needed relief to buyers, who all the while have been ‘tormented’ in the hands of developers who have always, unfailingly demonstrated their hegemony over the flat-buyers. In the recent years especially, the country has seen umpteen number of cases, involving the best of the builders, who can be called the ‘A’ category builders in the country to C-category builders, where there has been violation of promises made to buyers, violation of statutory approvals, delays in completion of projects, incomplete documentation, abrupt cancellation of projects and harassment of the customers etc. Hopefully, with this bill, some semblance of discipline would set in. Take a quick look at the salient features of the bill:
- It is applicable both to commercial and residential projects. (Earlier it was proposed only for residential projects)
- A State level / UT level Real Estate Regulatory Authority would be set up to regulate and provide oversight for the real estate transactions happening there.
- Any real estate project that has an area of at least 500 sq.mtrs or with eight flats, will have to get registered with the Regulatory Authority. And further, the bill mandates registration of real estate brokers as well with the authority.
- The bill mandates disclosure of various significant items on the registered projects, and makes promoters responsible for the disclosure. For example, besides the details about the promoter and the project, the disclosure would cover layout plans, status of land and other approvals, details of real estate agents working to sell the project, contractors etc.
- Builders would be required to deposit at least 70% of the sale proceeds of the project (including cost of land) in an escrow account, with the intent that this money would be used to meet construction costs. This should help in covering up for any delays that may happen in completing the project.
- Further, the bill proposes that for any default or delay on the part of the builders, they should pay to the buyers, interest at the same rate the builders charge the customers.
- Builders would be responsible for any structural defects in the projects they build, for a period of 5 years.
- The approval plans and project designs cannot be changed by the promoters without the consent of the customers.
- Establish a fast track dispute resolution mechanism for settlement of disputes through adjudicating officers and Appellate Tribunal.
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