Good news for property buyers! Ask anyone what is missing in real estate sector now. The immediate answer will be ‘accountability and transparency’, isn’t it? What is promised is not delivered, the promised completion dates are not kept up, the measurement of area is not clear (super built, carpet or built up etc.) This new proposed bill will address these issues. Thus, this is very good news for consumers and I hope the opposition will allow this to pass in the Parliament soon.
Setting up Regulatory Authority
Bill to establish the Real Estate Regulatory Authority for regulation and promotion of the real estate sector and to ensure sale of plot, apartment or building, as the case may be, in an efficient and transparent manner and to protect the interest of consumers in the real estate sector.
Registration of real estate project
Developers are expected to register their projects and disclose all relevant information including schedule of development works, land status, status of statutory approvals, pro-forma agreements, names and addresses of real estate agents, contractors and architects with the Regulatory Authority. (Note: small projects where the area of land is less than 1000 sq meters or 12 units are exempt). This bill is applicable to both residential and commercial projects.
Registration of On-going project
Ongoing projects that have not received Completion Certificates so far have also been brought under the purview of the Bill and these projects need to be registered with the Regulator within 3 months from the date of enacted of this bill.
Registration of real estate agents
No real estate agent shall facilitate the sale or purchase of any plot, apartment or building, etc., without obtaining registration under this act. Secondly, real estate agent should not facilitate sale or purchase of property which is not registered with the Authority.
Functions of the promoter
- The promoter upon getting Login Id, create his web page on the website of Authority and enter all the details of the proposed project, update on quarterly basis the details such as name of the buyers who have booked the flats/plots, number of flats/plots booked, etc.
- be responsible to obtain a completion certificate from the relevant competent authority
- be responsible for providing and maintaining the essential services, as may be specified in the service level agreements, on reasonable charges, till the taking over of the maintenance of the project by the association of the allottees
- take steps for the formation of an association or society or co-operative society, etc.
- A promoter shall not accept a sum more than ten per cent. of the cost of the apartment, plot, or building, as the case may be, as an advance payment or an application fee, from a person without first entering into a written agreement for sale with such person
The penalty for non-compliance or wrong compliance by promoters or agent may extend up to five per cent of the cost of plot, apartment or building, as the case may be, of the real estate project, for which the sale or purchase has been facilitated as determined by the Authority
Bill does not allow promoters to change plans and structural designs without the consent of 2/3rd of consumers of a project
Builders will now not be able to divert funds of their projects as they will have to deposit 50% of funds collected from buyers within 15 days in a separate bank account to meet construction costs
Apart from the above, many rules will be framed by the authority to help the buyers to get the right product for the right price.
A much needed Bill for India. Hope this bill is a reality (Act) soon.
Thought for the day
The best investment on earth is earth.