Rajya Sabha on 10 March 2016 passed the Real Estate (Regulation and Development) Bill, 2015. The bill among other provisions seeks to set up a Real Estate Regulatory Authority (RERA) for the orderly growth of the real state sector.
The bill also aims at protecting the interests of the large number of aspiring house buyers. It also wants to enhance the credibility of construction industry by promoting transparency, accountability and efficiency in execution of projects.
The bill was approved by legislators across the political spectrum, a rare sight as the last two parliamentary sessions had ended in a whitewash.
Main highlights of the Bill
• The Bill seeks to regulate transactions between buyers and promoters and provides for setting up of state level regulatory authorities.
• It also provides for registration of promoters and agents with the authorities.
• The promoters are mandated to deposit 70 percent of the money collected from buyers in a separate bank account, to be used only for construction of that project.
• They will also have to disclose project information including details of the promoter, land status, status of approvals, agreements along with details of real estate agents and contractors.
• The commercial real estate has also been brought under the ambit of the Bill.
• Projects under construction are also required to be registered with the RERA.
• If builders cause delays in transferring properties to buyers, the appellate tribunal would intervene and slap fines on them within 60 days. In case consumers fail to make payments to developers, the appellate tribunal can fine them, too.
• It provides for imprisonment of up to three years in case of promoters and up to one year in case of real estate agents and buyers for any violation of orders of Appellate Tribunals or monetary penalties or both.
• The builders would also be responsible for fixing structural defects for five years after transferring the property to a buyer.
• Buyers will now be paying only for the carpet area and not the super built-up area.
• The developers will now have to take consent of 66 per cent of the homebuyers in case they have to increase the number of floors or change the building plans. This will protect the buyers from any ad-hoc changes that are a norm presently.
• Projects only below the size of 500 square meters are exempted from the accountability ambit compared to earlier 1000 square meters or 12 apartments.
The bill was first introduced in the Lok Sabha by Congress leader Kumari Selja in 2013, when she was Union Urban Development Minister but was referred to the Parliamentary Standing Committee. In December 2015 Union Cabinet approved the bill after incorporating 20 amendments suggested by the Standing Committee.
The real state sector is the second largest employer after agriculture and contributes 9% to the Gross Domestic Product (GDP).
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Where: Rajya Sabha
When: 10 March 2016