Current Status of Real Estate Bill:
Approved by Rajya Sabha will be taken up for consideration and passage by the Parliament. The bill will be notified as an Act once it receives the assent of the President of India for its implementation across all States and Union Territories in the country.
Objectives :
The core objective of this Bill are twofold i:e to ensure sale of immovable properties in an efficient and transparent manner and to protect the interest of consumers in the real estate sector.
Applicability of the bill
1. The Real Estate Bill is applicable for both commercial and residential real estate projects
2. It is applicable for smaller sized real estate projects – 500 square meters or with eight apartments – also to be registered with the regulatory authority.
Key Highlights for Developer & Investor
1. Mandatory Disclosure by developer :
The Bill requires mandatory disclosure of all registered projects, which includes details of the promoter, project, layout plan, land status, approvals, agreements along with details of real estate agents, contractors, architect, & structural engineer & promoters to the customers. This is done through registration of real estate projects with the Real Estate Regulatory Authority (RERA).
2. Single window Clearance:
The regulatory authorities will promote a single-window system of clearances for real estate projects. This will speed up construction work that generally lags because of delays in getting permissions.
3. Structural Defects :
Builders will be liable for structural defects for five years, instead of two years earlier
4. Mandatory Deposit of fund :
It is compulsory for builders to deposit 70% of the amount raised from buyers into an escrow account in a scheduled bank within a period of 15 days in order to cover the construction cost of the project & ensure timely completion of the project.
5. Interest payment in case of delay :
Equal rate of interest to be paid by the promoters and buyers in case of default or delays
6. Project Specifications & Changes in Project :
- The Bill also specifies that promoters are barred from changing plans and design without the consent of consumers
- Carpet area has been clearly defined under the new proposals to include usable spaces like kitchen and toilets. Garage will be kept out of the purview of definition of apartment.
7. Possession :
- Allottees need to take possession of houses in two months of issuance of occupancy certificate.
- Formation of residents’ association is compulsory within three months of the allotment of a majority of units in a project.
8. Land Title Insurance :
Provision for arranging insurance of land title, which is currently not available. This will benefit buyers and sellers in situations where the title of the land is held invalid.
9. Regulatory :
- The Bill gives the power to establish one or more Real Estate Regulatory Authority in each State/UT, or one Authority for two or more States/UT, by the Appropriate Government, specifying their functions, powers, and responsibilities to exercise oversight of real estate transactions. The Bill shall also appoint adjudicating officers to settle disputes between parties, and to impose penalty and interest.
- Jail term of up to three years or penalty, or both in case of builders. Further, it also includes one year for real estate agents and buyers if they violate the orders of the appellate tribunals.
- Regulatory authorities can grade projects along with grading of promoters, besides ensuring digitization of land records
10. Agents & Brokers
- Eligibility criteria for Agents & Brokers
- Standard code of conduct expected by agents and Brokers and penalty in case of deviation
What is a Bill & How does it become an Act ?
