Government unveils pro-consumer real estate draft rules
The Centre unveiled pro-consumer real estate draft rules, which specified timely compensation and anti-discrimination clause to shield consumers from unfair practices. In a case of delay, the Real Estate Act's proposed rules set a 45-day deadline for the builder to refund the customer with interest and compensation. The rules also bar promoters from discriminating buyers based on religion, vegetarianism/non-vegetarianism, sexual orientation, or any grounds.
What is the Real Estate bill?
The Real Estate (Regulation and Development) bill seeks to establish a 'Real Estate Regulatory Authority' in states and UTs to regulate real estate transactions. The bill also mandates registration of all real estate projects and their details with the regulatory authority. It seeks to impose financial controls in the real estate market and to introduce stringent punishments to tackle issues of fraud and default.
History of the bill
The Real Estate (Regulation and Development) Bill was first introduced in 2013 under the UPA government. The bill aimed at regulating only residential real estate and not commercial real estate. The bill mandated that builders utilize 50% of funds accrued from allotment, in construction. These were the two primary reasons why the bill was sent to a Parliamentary Standing Committee for recommendations and amendments.
Amendments to the bill
A key amendment to the bill now mandates builders to use 70% of funds accrued from allotment for construction. The amendment also include bringing commercial real estate under the bill. The previous bill had a penal code for violations which is removed in the amendment. The Congress led opposition seeks to raise this issue when the bill comes up for hearing in the Parliament.
How will the bill benefit buyers?
The amended bill will now allow citizens to approach consumer courts to settle their disputes instead of the appellate body as mandated under the previous bill. Amendments also ensure that builders cannot alter plans or projects without the consent of 2/3 of the members allotted the property. Increasing the amount of money allotted for construction to 70% seeks to boost confidence in the sector.
Will there be an issue?
The establishment of a central regulatory authority for real estate in all states may interfere with state regulations and laws that are already in place as 'land' comes under the State List.
Union Cabinet approves Real Estate Bill
The Union Cabinet approved the Real Estate bill today that will bring in reforms and accountability into the real estate sector. The government said the proposed legislation is expected to promote regulated and orderly growth of the real estate sector through efficiency, professionalism and standardization. The bill will now be up for consideration and passing by Parliament.
Rajya Sabha passes the Real Estate Bill
Rajya Sabha passed the Real Estate Bill, directed towards guarding home buyers from real estate developers who do not deliver on time and monitoring India's real estate sector. The Congress had given its support to the Bill, which was passed by a voice vote. The bill would check unaccounted funds in this sector as 70% of the funds will now be deposited through cheques.
Real Estate Bill becomes an Act
The Real Estate Bill, 2016 became an Act and came into force on 1 May'16 after 8-year-long efforts.It kickstarted the process of creating institutional infrastructure and necessary operational rules to protect the interests of real estate consumers and promote the growth of the sector.
Public comments sought
The Housing Ministry made some draft rules of Real Estate Act's sections in five Union Territories public and sought suggestions in two weeks. 'Union Territories of Chandigarh, Andaman and Nicobar Islands, Daman and Diu, Dadra and Nagar Haveli, Lakshadweep Real Estate Rules, 2016' would be made public. Guidelines for Delhi would be notified soon while states could freely make changes in the central rules.