Track2Realty: The Real Estate (Regulation and Development) Bill was finally tabled in the Rajya Sabha on Wednesday, Aug 14, by Minister of Housing and Urban Poverty Alleviation Girija Vyas.
Soon after its introduction, the Bill was referred to the Parliamentary Standing Committee on Urban Development for reviewing and making suggestions, a government statement said.
The realty sector has been away from any sort of regulation till now. This is one of the reasons the industry has been opposing the Bill in its current form, which has proposed stricter penalties and even jail term for a maximum of three years for developers failing to comply with contracts.
The Cabinet in June had cleared the Bill, aiming at providing regulation in the sector, besides protecting buyers from erring developers and usher in an era of transparency. Ajay Maken was the Housing Minister at that time.
The Bill assumes importance in the wake of rising consumer complaints against developers for delaying projects by over four-five years, with no mechanism to curb the delays. On the contrary, if a buyer defaults on payment, he has to pay high interests while developers escape through loopholes in the sale agreements.
The Bill, which was in the making for five years and needs to be approved by Parliament, will make it mandatory for developers to launch projects only after acquiring all statutory clearances from relevant authorities.
Besides, it has certain tough provisions to deter builders from putting out misleading advertisements related to the projects carrying photographs of actual site. Failure to do so for the first time would attract a penalty, which may be up to 10 per cent of the project cost, and a repeat offence could land the developer in jail for a maximum of three years.
The legislation also aims to make it mandatory for a developer to set aside 50 per cent of the money collected from buyers in a separate bank account for every project to ensure that the money raised for a particular task is not diverted elsewhere.
It provides for a clear definition of the ‘carpet area’ and would prohibit private developers from selling houses or flats on the basis of ambiguous ‘super area’. It also seeks to establish an appellate tribunal to adjudicate disputes and hear appeals from the decisions or orders of the authority.
The industry has been opposing the Bill in its current form.
