Real Estate regulatory bill passed
Shailesh Suman
> The government today cleared Real Estate (Regulation and Development) Bill, 2013, paving the way for much awaited regulator in the residential real estate industry. Commercial real estate sector has also been brought under the ambit of the Bill.
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> The real estate sector has been devoid of any kind of regulation till now. The development assumes significance in the wake of rising consumer complaints against developers for delaying projects by over 4-5 years, with no mechanism to curb the delays. On the contrary, if a buyer defaults on payment, he has to pay high interests while developers escape through loopholes in the sale agreements.The amendments to the Bill were approved today in the Cabinet meeting. Under the proposed law, 10 per cent of project cost will be imposed as penalty for non-registration and another 10 per cent of project cost or 3 year imprisonment or both if still not complied with the rules and regulations.
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> For wrong disclosure or non-compliance of information, 5 per cent of project cost will be imposed. The regulators will have the power of cancelling registration in case of persistent violations and decide on the further course of action regarding completion of such projects.
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> The Bill was introduced in the Rajya Sabha on August 14, 2013 and referred to the Parliamentary Standing on Urban Development, which gave its recommendations and most of them have been incorporated in the Bill.
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> The Bill, which has been in the making since 2009, also mandate developers to deposit 50 per cent of the money collected from the buyers in a project within 15 days to a separate bank account to be used for construction of that project. However, this is less than what was formulated by the previous UPA government, where about 70 per cent of the amount had to be kept for construction of that project.
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> Developers, both in residential and commercial sectors, will be required to register their projects with the regulatory authorities to be set up and they will have to mandatorily disclose all information regarding the promoters, project, layout plan, schedule of development works, land status, status of statutory approvals amongst others.
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> In an official statement, the government said the new Bill will create a uniform regulatory mechanism and protect the interests of consumers while at the same time enhancing the growth of construction sector through enhanced credibility. It will also ensure accountability and transparency, enabling the sector to access capital and financial markets.
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> Ongoing projects that have not received completion certificates have also been brought under the purview of the Bill and such projects will need to be registered with the regulator within three months. Developers will not be allowed to change plans and structural designs without the consent of two-third of buyers of a project.
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> Real estate agents also have been made punishable for non-compliance of the orders of Regulatory Authority and Appellate Tribunals to be set under the proposed law.
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> Web based online system for submitting applications for registration of projects to be introduced within one year of the establishment of Regulatory Authorities and Regulator has to decide cases within 60 days. States will have to make rules within one year and one or more Regulatory Authorities will be set up in each State/UT or one Authority for two or more States/UT by the concerned Governments for oversight of real estate transactions.
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> Adjudicating officers will be appointed to settle disputes and impose compensation and interest. Appeals against adjudicating officer and Regulatory Authority will lie with the Appellate Tribunals to be set up and final appeals will lie only with High Courts.
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> Thanks & Regards
> Sanjay Munshi
> Sent from iPhone
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