The long-pending Bill promises relief for harassed home buyers
The Central Cabinet has approved the long-pending Real Estate Bill that seeks to regulate the hitherto unregulated housing sector in India. If enacted, it is expected to bring considerable relief to ordinary buyers and investors. “By imposing strict regulations on promoters, the Bill ensures that construction is not only completed in a timely manner but that the buyer gets the specifications promised,” said Anuj Puri, Chairman & Country Head, Jones Lang LaSalle India.
The Bill talks of an appellate tribunal for quick dispute resolutions, besides restricting developers from making misleading advertisements, and insists that all approvals are in place before they market the project.
“It will help institutionalise the sector, giving it the fillip to move to a new phase of growth. Hopefully, it will be a step towards industry status for the sector,” said Sanjay Dutt, Executive, MD-South Asia, Cushman & Wakefield. “With the safety features proposed in the Bill, the RBI’s negative perception of lending to housing projects will be dispelled and developers will find it easier to access formal funding, thereby not have to rely on sales to fund the construction of the projects,” he added.
Real estate brokers have been brought into the ambit of the Bill and their registration is mandatory. Welcoming the Cabinet approval, Credai’s National President C. Shekar Reddy said that from the industry perspective, it is important that the bill maintains equilibrium between developers and end-users. “Certain provisions must be amended, otherwise it will result in substantial increase in cost to home buyers.”
Meanwhile, Credai chairman Lalit Kumar Jain said that the Bill seeks to whip only errant developers and expressed fear that it could encourage corruption instead of curtailing a social menace.
RICS, the body for standards in land, property and construction, said the Bill could be termed a‘housing regulation bill’ rather than a ‘real estate regulation bill’ because it applies only to the primary residential market, and not the secondary or commercial markets. “The stipulation of ‘carpet area’ as the only measurement unit will limit fraudulent practices arising from use of measurement units such as saleable area, super built-up area etc,” said a RICS statement.
T. Chitty Babu, CCEO, Akshaya, said that the Bill would “help construct a clean, clear, principled and balanced real estate system to reduce the burden on customers as well as developers.”
Pointing to the fact that the Bill was buyer-centric, Ganesh Vasudevan, CEO, IndiaProperty.com, said that it “won’t be accepted in totality by real estate developers.”
As of now, the Bill has received Cabinet's approval only. Now it remains to be seen whether the government chooses to introduce it by passing an Ordinance, or whether it goes before Parliament for a discussion before it is put to vote in both houses. After that it goes for the Persident's signature. Only then will the new measures be finally set in place.
Keywords: Real Estate Bill