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The real estate sector is finally likely to get a regulator. The sector, which has been blamed for its opaque practices, high handedness, and generation of black money is now expected to be controlled at the state level. The Union Cabinet on Tuesday approved amendments to the long-pending real estate bill.
The Real Estate Regulatory Bill will now be tabled in the Parliament for approval, which will make it a law. In a statement, the NDA government said that the bill seeks to ensure accountability and transparency, which will in turn enable the real estate sector to access capital and financial markets essential for its long-term growth.
So what does this mean to a person looking out to buy a property? Here are five salient points that will affect a real estate buyer in what has more or less been a seller’s market.
1. If you are looking to buy a property, ensure that the project is registered with the state level regulatory authorities called Real Estate Regulatory Authorities (RERAs). Even real estate agents, smaller projects and commercial projects are expected to be registered under this authority. Developers cannot advertise or launch property without prior registration.
2. Registration is not a bureaucratic process, but it ensures that the developer is ready with all the details and clearances for the project and that the project will not be stuck because of any procedural issue. The developer will have to disclose layout plans and submit clearances with the regulator along with the name of contractor, architect, structural engineer who will be working on the project. These details will be uploaded on the website of RERA. This move lends credibility to the project and ensures transparency.
3. By registering the layout, a developer cannot later change the plan shown to the buyer at the time of booking the property. The developer will need the consent of two-thirds of buyers in a project to make any changes to the plans. The responsibility of structural defects lies with the developer. Importantly, projects will now be sold on the basis of carpet area only. This will curb the practice of selling property under super-built up areas, flower pot areas and similar opaque practices.
4. Delay in projects has also been addressed by the bill as the developer will have to disclose the schedule of completion of the project. In case the project is delayed buyer can claim refund with interest and compensation.
5. In case there are still problems with the project, home buyers have been given the option to approach the consumer court with their grievances. A fast track dispute settlement mechanism under an adjudicating officer of a rank of District Judge has been appointed. Appeals will be heard by Appellate Tribunals.
The Real Estate bill to a large extent will ensure greater accountability, reduce fraud and delays. The Bill puts a lot of responsibility on the promoter of the project and empowers the buyers.
But the issues of high real estate prices and clarity on alternate mode of payment have not been completely addressed.
