Real Estate Regulation and Development Bill which will address a long-standing demand to bring in a regulator for the real estate sector got approved on 7th April by the Union Cabinet.
The Real Estate (Regulation & Development) Bill seeks to protect the interests of consumers and establish regulatory bodies at the Centre and States for ethical and transparent business practices in the real estate sector.
The Cabinet, however, deferred its decision on the proposed juvenile justice amendment bill that will allow minors between the age of 16-18 years accused of heinous crimes like murder or rape to be treated as adults.
The Bill provides for mandatory registration of all projects and real estate agents who intend to sell any plot, apartment or building with the Real Estate Regulatory Authority. It makes mandatory the disclosure of all information for registered projects like details of promoters, layout plan, land status, schedule of execution and status of various approvals. The Bill also seeks to enforce the contract between the developer and buyer and a fast track mechanism to settle disputes.
The government said the Bill is expected ensure greater accountability towards consumers, and to significantly reduce frauds and delays. It said the proposed legislation is expected to promote regulated and orderly growth of the real estate sector through efficiency, professionalism and standardization
“These measures are expected to boost domestic and foreign investment in the sector and help achieve the objective of the Government of India to provide ‘Housing for All by 2022’, through enhanced private participation,” a government release said.
The Real Estate Regulation Bill was first introduced by the UPA government in the Rajya Sabha in August 2013 and was then referred to a Parliamentary Standing Committee, which had submitted its report in February 2014.
The NDA government had made some important changes to the original legislation. The earlier Bill had mandated that a developer put 70 per cent of the buyer’s investment into an escrow account that would be used only for the construction of that project. Last year, the Housing Ministry brought this down to 50 per cent, reportedly after much lobbying from the real estate companies. The other major change was to bring the commercial segment of the real estate sector within the ambit of the Bill, which was earlier limited to regulating only the residential segment.
The Bill also now includes a condition that prohibits a developer from changing the plan in a project unless 2/3rd of the allottees have agreed for such a change.