The highly-awaited real estate regulatory bill has now been passed by the Rajya Sabha. The real estate (regulation and development) bill, 2016 seeks to protect the interests of aspiring house buyers. The bill further looks at enhancing the credibility of construction industry by promoting transparency, accountability and efficiency in the execution of projects. As the bill further makes strides towards becoming a law, here are the top 10 things you should know about it.
- Escrow account
The centre has gone beyond the recommendation of the select committee and now requiring developers to deposit 70% of the collections form buyers in a separate accounts towards the cost of construction including that of land as against a minimum of 50% suggested by the select committee.
- Area for project registration
Norms for registration of projects has been brought down to plot area of 500 sq.mtr. or 8 apartments as against 4,000 sq.mtr. proposed in the draft bill in 2013 and 1,000 sq.mtr. or 12 apartments suggested by the standing committee.
- Commercial projects registration mandatory
Commercial real estate also brought under the ambit of the bill and projects under construction are also required to be registered with the regulatory authority. About 17,000 projects are reported to be at various stages of development.
- Defined carpet area
Capret area has been clearly defined which forms the basis for purchase of houses, eliminating any scope for any malpractices in transactions.
- Interest payable on project delays
Ending the earlier asymmetry, which was in favour of developers, both consumers and developers will now have to pay same interest rate for any delays on their part.
- Structural defects timeline increased
Liability of developers for structural defects have been increased from 2 to 5 years and they can’t change plans without the consent of two thirds of allottees.
- Insurance of land titles
The bill provides for arranging insurance of land title, currently not available in the market which benefits both the consumers and developers if land titles are later found to be defective.
- Timely dispute redressal
Specific and reduced time frames have been prescribed for disposal of complaints by the appellate tribunals and regulatory authorities.
- Regulatory violation
A provision is now made for imprisonment of up to 3 years for developers and up to one year in case of real estate agents and consumers for any violation of tribunals and regulatory authorities.
- Project blueprint to be submitted to the authorities concerned
The bill requires project promoters to register their projects with the regulatory authorities disclosing project information including details of promoter, project including schedule of implementation, lay out plan, land status, status of approvals, agreements along with details of real estate agents, contractors, architects, structural engineers etc.
Sources: The Economic Times, Mint, The Times of India, The Hindustan Times