The real estate regulatory Bill should fix accountability on all stakeholders, including government authorities and local urban bodies involved in the development of projects, property developers and consultants said today.
While welcoming the Cabinet's approval to the Real Estate (Regulation and Development) Bill, 2015, they said the proposed law will bring in transparency and boost buyers' confidence.
However, they said the law should be made "water-tight" by bringing under its ambit the government authorities that give approvals for development of projects and also occupancy certificates.
Developers are worried that they will be penalised under this proposed law on project completion due to delay in getting approvals from authorities.
Yesterday, the Cabinet approved various amendments to the Bill, introducing provisions for depositing 70 per cent of the money received by builders for a project in the escrow account and punishment for violations.
Terming the Bill as a game-changer for the realty market, CBRE South Asia Chairman and MD Anshuman Magazine said it would not only protect the consumer, but encourage individual buyer and financial institutions, both domestic and international, to invest in the real estate market.
However, he said the ease of doing business in the real estate sector needs to be implemented through a time-bound approval mechanism by the government, local and urban bodies.
"Therefore, the government bodies also need to be held accountable for ensuring reforms in archaic laws and timely project approvals," Magazine said.
Echoing similar views, JLL India Chairman and Country Head Anuj Puri said the Bill would bring in the much-needed transparency and accountability.
However, "the strict punishment for developers without bringing the relevant government agencies and approval process under its ambit looks a bit one-sided".
Cushman and Wakefield India MD Sanjay Dutt termed the move as "a landmark initiative", saying the Bill will ensure only well capitalised developers start and remain operative.
"However, the central government has to ensure that apart from making developer community regulated, state government and various state-run approval bodies are aligned and made more accountable," he added.
Realtor apex body CREDAI President Getamber Anand favoured the idea of a regulator, but qualified it by saying authorities should come under the ambit of this Bill and the same should not be applicable with retrospective effect.
"We wish sanctioning authorities were included in the real estate Bill because without bringing them on board, delays would continue in implementation of projects," Raheja Developers MD Navin Raheja said.
According to Sare Homes MD Vineet Relia, the move is "a good push" to bring back consumer confidence and encourage transparency in the sector.
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The Bill envisages establishment of the Real Estate Regulatory Authority in states/UTs to regulate transactions.
The proposed law would be applicable both for commercial and residential real estate projects.
As per its provisions, real estate projects and agents should be registered with the Authority. The bill proposes mandatory disclosure of all registered projects, including details of the promoter, project, layout plan, land status, approvals, agreements along with details of real estate agents, contractors, architect and structural engineer.
Welcoming the move, Knight Frank India CMD Shishir Baijal said the amendments are likely to lift overall sentiment.
Shardul Amarchand Mangaldas & Co Partner Mrinal Kumar also flagged the issue of accountability for authorities responsible for granting licences, permits and approvals.
Supertech Chairman R K Arora is of the view that the Bill should also engage approving authorities so that the real estate projects don't get delayed.
Deloitte India Senior Director Hemal Mehta felt that the Bill would "certainly" lead to higher disclosure related to projects.
Omaxe CEO Mohit Goel said the proposed law would ensure the interest of home-buyers will be duly protected from fly-by-night developers who operate in large numbers.
"Because of a few unscrupulous builders, the trust factor has eroded considerably over a period of time and this Bill will help restore confidence among home-buyers," he added.