Anita Kurup
The Rajya Sabha today passed the Real Estate Bill – a Bill that has long been in the pipeline. The Bill, pending since 2013, promises to bring in transparency and will protect the interests of home buyers.
Some of the tenets of the Bill:
- The Real Estate bill has given the nod to States and Union Territories to set up their own Real Estate Regulatory Authority (RERA) – the regulator will address grievances against any builder. The regulator will have power to regulate both residential and commercial properties.
- As per the Bill, the developer will have to put aside 70% of project funds in a dedicated bank account. This will prevent developers from using the booking money of a project to invest in other projects. This will also ensure that developers have an incentive in quick completion of projects.
- As per the law, developers are mandated to post details like project plan, layout plan, approvals, land title status, details of promoters, contractors, architects, date of completion with the State RERA – Customers can access this information from the RERA websites. Real estate agents also have to register with their State RERA. Developers cannot make changes to the plan once sold unless they get a written consent of the buyer.
- Norms on size of projects to be registered with RERA has been made 500 sq metres instead of 1,000 sqm. The law states that super built up area is no longer valid – properties have to be sold on clearly defined carpet area.
- Under the law, if there is a delay in completion, the developer is liable to pay the same interest as the EMI being paid by the customers back to the customer.
- If a developer does not register his property, he will have to pay upto 10% of the project cost as penalty. Any violation of an order by the appellate tribunal of RERA will invite jail term of a maximum of three years or more. Agents will face upto Rs 10,000 per day during the period of violation.
- If the customer notices a defect in the product within a year of taking possession, the customer can write to the developer and demand after sales service.
Once passed into law, the Bill will increase customer confidence and help developers to build their brands based on quality and timely delivery of projects.
