New Delhi, April 10, 2015
“The cabinet approval of the long pending Real Estate Regulatory Bill is a positive first step towards bringing in the much needed transparency to the sector. The Bill will bring about a common regulatory platform for all stakeholders in the industry thereby ushering in a higher degree of accountability amongst builders and sales intermediaries.
The Bill in its current form applies to both residential and commercial real estate, and is far more comprehensive and holistic in approach, addressing both the regulatory and development oriented aspects of the industry. The following features are notable-
1. Creation of state wise regulatory authorities for the sector
2. Mandatory registration of real estate projects and agents
3. Mandatory public disclosure of all project details- will go a long way in ensuring easier scrutiny on compliance to approved plans, progress on statutory approvals etc.
4. Functions and duties of a promoter are clearly defined- will bring in greater accountability on the part of builders and give room for a clear locus standii for buyers to pursue legal proceedings if any against errant builders
5. Builders are required to deposit 50% of the amount realized towards bookings on a project in a commercial bank account within 15 days of receipt, and deploy the funds for construction of the project. This will ensure better adherence to delivery timelines and will also minimise cost overruns due to delays on account of inadequate capital.
6. Functioning of real estate agents will be better monitored as they are required to register themselves with the Regulator. However the Bill does not propose any mandatory training program or certification required to operate as an agent. Also agents are required to sell only registered projects. This will help control price rise to a great extent particularly in investor dominated markets.
7. Punitive measures outlined for transgressions by builders
8. Responsibilities of the allotees is also defined making the bill a lot more enabling and development oriented.”