The Rajya Sabha passed the Real Estate Regulatory Bill and now it’s awaiting clearance in the Lok Sabha level. The bill essentially regulates the largely unorganised real estate sector and brings security and clarity to both buyers and builders. Once the bill is passed in the Lok Sabha there will be ratification of the bill in each state and then establish a state authority that will be set up in lines of the law.
Here are a few things you need to know about this bill
- A real estate regulatory body will be established in each state and can be approached for redressal of grievances against builder.
- This regulatory body will address issues from other commercial and residential real estate transactions
- Now 70% of the funds collected and borrowing taken by the builder for a particular project need to be mandatorily parked in a bank account that is exclusively dedicated to the project. This reduces the cross-utilization and ensured projects are delivered on time.
- Builders have to post all information about the project such as project plans, permissions, approvals, status, completion schedule, titles of land and sub-contractors involved in the project. This information should be made available to both customers and the regulatory body.
- Carpet area will be the area considered for sale and builders cannot use super built-up area for the sale.
- Project delay will result in liability of the builder and has to pay the same interest as the EMI being paid by the consumer to the bank back to the consumer.
- If a builder violates an order given by the regulatory body, then the builder will have to serve a maximum jail term
- Builder now has to ensure that all deficiencies arising from the project during the first year are serviced by him.
- If the builder is affecting a change in the original plans then he needs to get the written consent of the buyer to do so
- If projects are more than 8 apartments or 500 sq mts then they have to mandatorily register with the regulatory body
The bill brings in a much needed regulatory system into real estate which is a high investment area but has no regulation till date. This has resulted in low buyer security in the past and with the introduction of this bill there is also hope that the industry which is showing weak growth patterns will receive a much required boost.