What is a real estate regulatory bill?
The real estate bill was proposed to protect the interest of buyers by encouraging an environment that is transparent and corruption-free in the arena of construction and implementation of real estate projects by promoters. In addition, this bill also ensures that the promoters of their respective real estate projects are held responsible and accountable for not registering their projects with the Real Estate Regulatory Authority. Real estate brokers who play a significant role in facilitating the sale and purchase of properties of a particular project too brought in the purview of this bill.
With the objective to protect home buyers, the much awaited real estate bill, 2016, did become an act on May 1, 2016. In order to bring transparency in the real estate sector, The Rajya Sabha passed the Real Estate Regulatory Bill, flaunted as an unprecedented reform measure in the Indian real estate sector.
Property experts reckon that the establishment of this act is a very positive development especially for home buyers since the act seeks to protect the rights of home buyers.
Vital Things To Know About This Bill
Irrefutably, the real estate regulatory bill will regulate the real estate industry infinitely and bring immense clarity in an otherwise convoluted real estate industry.
Below mentioned are a few of the vital things you need to know about this bill:
- As per this law, developers are expected to park 70 per cent of the project funds in a bank account, which means from now onward developers won’t be able to invest in new projects by taking the help of the proceeds of the booking money for one project. This way, the proceeds will help in covering the cost of construction and land cost and surety that the amount deposited will only be used for concerned project only.
- As per this law, the real estate regulator is vested with the authority to govern all types of residential and commercial real estate transactions.
- Developers are expected to post all details relevant to their project/s with the State Real Estate Regulatory Authority (RERA), hence pass the same details on to the buyers.
- The good news is, carpet area has been vividly defined now as per this law. Therefore, the prevalent practice of selling properties on the basis of vague super built-up area for all real estate projects will perish.
- Now the law demands a developer to pay the same interest as the EMI being paid by the buyer to the bank if there is any delay in project completion.
- Furthermore, a buyer can get in touch with the developer within one year of taking possession to request after sales services if required.
- This law restricts a developer to make changes to the plan that had been already sold without a written consent of the buyer.
- Lastly, the maximum jail term for a property developer who violates the clauses of this law is three years with or without a fine.
The objective of this Bill is to improve the overall transparency and accountability in the real estate sector by regulating the sale and purchase of residential and commercial projects. Passing of this bill has, unarguably, been one of the major steps towards the betterment of the Indian real estate sector, and property developers will take the appointed regulatory authorities for granted at their own peril.