The long awaited real estate regulatory body seems to be a reality very soon, recently the real estate regulation bill was presented by Mr. Venkaiah Naidu, minister of housing & urban poverty alleviation in the Rajya Sabha and passed by the upper house. Let us find out the highlights of the bill :-
1) All the projects need to be registered with the regulatory authorities disclosing all the project details like the approvals, layout, project status and details of the promoters, land status, agents, contractors, structural engineers.
2) The projects under the purview of the regulatory authorities are those measuring a minimum of 500 sqmts or 8 flat.
3) A minimum of 70 percent of the total receipts for the project will be deposited by the builder in a separate escrow account within 15 days for that particular project to cover the construction and the land cost.
4) The builder buyer agreement will no longer be one sided favoring the builder. Penalty put on the buyer for the delay in payments would be same as the builder will pay in case of delay in possession.
5) Builder needs to explicitly define the carpet area, which will include the total usable area including that of kitchen and toilets.
6) Builder cannot change the layouts and any other project plans without the consent of at least 2/3rd of the total allottees.
7) Pictorial representation in the ad campaigns and the brochure should be exactly the same as the actual buildings; builder can be jailed up to 3 years or penalized up to 10% of the total project cost in case of any false statements issued by them.
8) Pre Launch sales cannot be done by the builder until and unless all the necessary approvals from the local authorities are attained and project registered with the regulating authorities.
9) Builders will be liable for any structural defects up to 5 years of the possession of the project.
10) Builder cannot discriminate on the basis of the religion, region, caste, creed, sex and gender.
11) Appellate tribunals to adjudicate all the cases within 60 days.
1) Buyers will be more confident than ever before therefore the investment will boost in the sector.
2) It will improve the much needed transparency and accountability which will affect the sentiments in a positive manner.
3) Diversion of the funds from one project to the other will be lesser.
4) Buyers will not be harassed and helpless anymore; customer will be the king once again.
5) Accountability of the builders will increase resulting in the improvement of the quality of construction.
6) Good developers will flourish while the unscrupulous ones will be eliminated.
7) Overall the real estate sector will be cleaner as the interest of the buyers will be safeguarded.
The major contributor in the delay in the projects is slow process of the approvals by the government agencies which has not been included in the bill thus this is a concern which needs to be addressed.
1) Contribution of the real estate sector in the total GDP is 9%.
2) Real estate sector is the second largest employer in the country after the agriculture sector.
3) 10 Lac people buy home every year with a whopping 3.5 lac crore investment.
4) Total of 2349 to 4488 new projects have been launched every year during the last 5 years between 2011-15 in 27 major cities of the country including 15 capitals.
5) Total of 17526 new projects have been launched in 5 years in the 27 cities.
6) Total investment in the last 5 years in the real estate sector is up to the tune of 1369820 crore.
7) Total real estate companies operational in the country are 76044.