The Union Cabinet on 7 April 2015 approved amendments to the Real Estate (Regulation and Development) Bill, 2013. The bill protects the interests of millions of consumers and curbs malpractices in the real estate sector.
The decision was taken at the Cabinet meet chaired by Prime Minister Narendra Modi in New Delhi.
Through the amendments, the applicability of the Bill has been extended to commercial real estate too. Ongoing projects that have not received Completion Certificates have also been brought under the purview of the Bill and such projects will need to be registered with the Regulator within three months.
Objective of the Real Estate Bill, 2013
• To create a uniform regulatory mechanism across the country so as to enhance the growth of construction sector
• It seeks to ensure accountability and transparency in the real estate sector to access capital and financial markets essential for its long term growth
Key provisions of the Real Estate Bill, 2013
• It regulates transactions between buyers and promoters of residential real estate projects.
• It establishes state level regulatory authorities called Real Estate Regulatory Authorities (RERAs).
• It also provides for establishment of state level tribunals called Real Estate Appellate Tribunals. Decisions of RERAs can be appealed in these tribunals.
• Residential real estate projects, with some exceptions, need to be registered with RERAs. Real estate agents dealing in these projects also need to register with RERAs.
• Promoters cannot book or offer these projects for sale without registering them.
• On registration, the promoter must upload details of the project on the website of the RERA. These include the site and layout plan, and schedule for completion of the real estate project.
• 70 percent of the amount collected from buyers for a project must be maintained in a separate bank account and must only be used for construction of that project. The state government can alter this amount to less than 70 percent.
The Bill was originally moved by the erstwhile UPA government led by former Prime Minister Manmohan Singh but was applicable only for residential real estate. The Bill is pending in the Rajya Sabha.
Other decisions taken during the Cabinet meet
• Six percent hike in the Dearness Allowance (DA) for central government employees and pensioners with effect from 1 January 2015. With this hike, the DA now has gone up to 113 percent of the basic pay from 107 per cent.
• It approved foreign investments in the two pharmaceutical companies, viz., Aurobindo Pharma and Glenmark Pharmaceuticals Limited entailing an investment of 4187 crore rupees.
• Approved the strengthening and widening of 455 kilometers of National Highways with a total capital cost of about 9500 crore rupees.
When: 7 April 2015