Cabinet approves Real Estate Bill: What it means for home buyers and builders

By: | Published: December 10, 2015 2:03 PM

The Union Cabinet on Wednesday approved the Real Estate (Regulation and Development) Bill, 2015 with amendments, as recommended by the Rajya Sabha Committee.

Real Estate BillThe Union Cabinet on Wednesday approved the Real Estate (Regulation and Development) Bill, 2015 with amendments, as recommended by the Rajya Sabha Committee. (Photo: Reuters)

The Union Cabinet on Wednesday approved the Real Estate (Regulation and Development) Bill, 2015 with amendments, as recommended by the Rajya Sabha Committee. The Bill will now be taken up for consideration and passing by the Parliament. We take a look at the salient features of the Bill and how it will affect the buyers

The Bill is aimed to protect the interest of consumers, promote fair play in real estate transactions and to ensure timely execution of projects.

The salient features

1. Applicable both for commercial and residential real estate projects

2. Establishment of ‘Real Estate Regulatory Authority’ in States/UTs to regulate real estate transactions

3. Registration of real estate projects and real estate agents with the Authority

4. Mandatory disclosure of all registered projects, including details of the promoter, project, layout plan, land status, approvals, agreements along with details of real estate agents, contractors, architect, structural engineer etc

5. Deposit of specified amount in a separate bank account to cover the construction cost of the project for timely completion of the project

6. Establishment of fast track dispute resolution mechanisms for settlement of disputes through adjudicating officers and Appellate Tribunal

7. Civil courts jurisdiction prohibited from taking up matters defined in Bill, however, consumer court allowed to hear real estate matters

8. Promoters barred from changing plans and design without consent of consumers

9. Provision of Appropriate Government to make rules for the matters specified in the Bill, and the Regulatory Authority to make necessary regulations

What it means for buyers and builders

Anuj Puri, chairman and country head, JLL India, said, “The passage of the bill by the cabinet is a major step towards introducing it in the Rajya Sabha. By accepting all the changes made by the elect committee, the government has not left any chance of this bill not being acceptable to the opposition an thus has cleared the decks for its passage.”

He further said that the money collected from buyers to be deposited within 15 days and maintained in an escrow amount are to be to the tune of 50 per cent of total and to be used only for the specific project.

The bill will bring in the much needed transparency and accountability in the real estate sector, though the strict punishment for developers without bringing the relevant government agencies and approval process under its ambit, looks a bit one-sided.

The bill shall create a much required consumer right protection umbrella for buyers of real estate thereby increasing consumer confidence and creating lasting developer brands who shall be known for quality and timely delivery of projects.

The bill shall have far-reaching positive consequences for the sector in terms of its operating procedures while creating a comprehensive consumer redressal mechanism

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