Will this long pending legislation help orderly development and growth of real estate? A look by K. Sukumaran
The Real Estate (Regulation and Development) Bill, 2013, was introduced in the Rajya Sabha on August 14. What are the salient features of this Bill? Will this long-pending legislation help orderly development and growth of real estate in the country? Will the home buyer be benefitted?
The vast growth of real estate sector in India, its effect on the country’s economy and the need to protect the consumer compelled the government to regulate the sector by passing a model bill, especially since the subject falls within the jurisdiction of the State.
Finalisinge an important legislation like this has been under the consideration of the Urban Development Ministry since 2009. Controlling the sector is one aspect and justice to all players in the field is another. Transparency in operations also need to be ensured.
The developers and builders took it as an effort to ‘leash’ them. They have always been complaining about the multi-point clearances, its cost and delay.
Since numerous authorities are to be dealt with in land purchase, plan approvals, obtention of completion/occupancy certificates etc., the developers/builders and their associations have been pointing out that the regulator should have legal authority over all of them. They also suggested that a single point clearance be brought in.
Salient features of the Bill
Regulator/s will be set up, similar to those for the stock market, insurance and telecom. Each State will have a Regulator.
The developers/builders have to register with the Regulator. Initially, some cut-off area will be prescribed.
The bill is intended to cover only residential property.
The Regulator has to ensure that all statutory clearances have been obtained by the developer/builder before sale of the property.
Builders to sell the residential property on the basis of carpet area.
Failure to declare statutory clearances will attract fine/imprisonment
Realty developers must deposit 70 per cent of the funds in a designated bank account in order to prevent diversion of resources.
Authorities/systems proposed under the legislation
Real Estate Regulatory Authority
Dispute resolution machinery, basically the disputes between the developers/builders and buyers
Appellate Tribunal, which will handle disputes between the regulator, players and even the Government.
The way forward
A discussion on the bill in Parliament is likely. Even amendments can be possible. Once the bill is passed by both Houses of Parliament, it will need to receive the President’s assent. It is reported that 22 States have agreed to the bill in its present form and suggestions given by five States have been incorporated.
Once the legislation becomes a reality, project launches may slow down. This may be why there has been many new launches in the recent past.