Know about the New Real Estate Regulation Bill and how it will help the property buyers

The new amended Bill is intended to encourage fair play in the transaction of properties and protect the interests of the consumers and buyers alike

With much effort and some improvements the Real Estate Bill has finally been passed. The current government approved the much awaited bill which is intended to protect the interests of the consumers and builders, ensure timely execution of projects and encourage fair play in the transaction of properties. In short the Bill approved seeks to regulate the country’s property market and be vigilant regarding delayed possessions.

Let us look at some of the key features of the Real Estate Bill 2015:

  • The Bill provides uniform supervisory environment to ensure quick settlement of disputes and orderly growth of the real estate sector.
  • The New Real Estate Regulation Bill is now pertinent for both residential and commercial projects.
  • The Bill ensures to restore the confidence of consumers in the sector by offering them transparency in the transactions related to real estate markets.
  • The Bill also calls for the establishment of a ‘Real Estate Regulatory Authority’ in States or Union Territories (UTs) to regulate real estate transactions.
  • The Bill ensures mandatory disclosure of all registered projects, which includes details of the promoter, project, layout plan, land status, approvals, and agreements along with details of real estate agents, contractors, architect, by the promoters to the customers through registration of real estate projects as well as real estate agents with the Real Estate Regulatory Authority.
  • The Bill also includes a provision requiring real estate developers to deposit 70 per cent of the project cost into an escrow account in a scheduled bank within a period of 15 days to cover the construction cost of the project for timely completion of the project.
  • Unlike before when 1,000 square metre area and 12 flats had to be registered now the Bill has made mandatory registration of projects of 500 square metre and 8 flats.
  • The amended Bill also includes equal rate of interest to be paid by promoters and buyers in case of default or delays, while the liability of promoters for constructional defects has been increased from 2 to 5 years.
  • Distressed buyers instead of approaching the Regulatory Authorities, can now approach 644 consumer courts which are available at district level in the country.
  • The Bill ensures clarity by including usable spaces like kitchen and toilets in the carpet area which was not there earlier. Apart from this, the garage is no more included in the apartment and has to be separately defined.
  • Regulatory authorities ensures promoting single window system, wherein the traders have to submit regulatory documents such as customs declarations, applications for import/export permits, and other supporting documents such as certificates of origin and trading invoices at a single location.
  • Regulations are now required to be made within 3 months of its formation by the regulatory authorities.
  • According to the Bill the allottees shall take possession of their respective houses in two months of issue of occupancy certificate. And the States will now have to make rules within 6 months of notification of the proposed Act, this prevents delay in registration resulting in denial of revenues to the respective states in the form of stamp duties and registration charges.
  • According to the Bill the Chairmen and Members of regulatory authorities and appellate tribunals are not allowed to take up post-retirement jobs except in government and statutory bodies.
  • The Bill has also proposed a jail term of up to one year in case of real estate agents and buyers for the violation of orders of appellate tribunals. And a jail term of up to three years in case of promoters.
  • To settle the grievances at the earliest the appellate tribunals are now required to settle the cases in 60 days and regulatory authorities shall dispose of complaints in 60 days.
  • To protect consumers right the Bill also bars the promoters from changing any plan or design without the consent of consumers.
  • The Bill also includes the information regarding the real estate projects that are in progress in the urban cities of the country.

Here are the ways how the bill will help buyers:

  • Without prior registration with the real estate authority the developers cannot advertise or launch projects.
  • Developers have to advertise carpet area, which is the area within the flat, whereas the area which is not within the walls of a flat like lobby is prohibited from advertising.
  • To settle disputes and impose compensation each state will get a real estate regulator, which will settle disputes and impose compensation.
  • Apart from this all housing and commercial projects will have to be necessarily registered with the regulator, thereby providing buyers genuine projects.
  • There will be transparency in the projects as the developers will have to mandatory disclose the layout plans and submit clearances. They will also have to clearly mention the name of the contractor, engineer and architect associated with the project.
  • Buyers can claim for compensation with interest if the promoters fail to deliver projects on time.
  • To protect a buyer from frauds and ensure that the projects are completed on time, promoters will have to deposit 50 per cent of the amount raised from buyers in a separate bank account within a period of 15 days.
  • If developers want to make any changes in the plan or design of the building, after the buyers have paid some amount of the total cost of the property then he has to take two-third consent of the buyers.