The Union Cabinet has approved the Real Estate (Regulation and Development) Bill 2015. The Centre has published a press release which stated that the bill is a pioneering initiative to protect the interest of consumers, promote fair play in real estate transactions and to ensure the timely conclusion of the projects.
The cleared bill has featured major amendments to the existing Real Estate Bill, which are implemented based on the recommendations of a Rajya Sabha committee. The bill is pending in the upper house of the Parliament and below is some of the major amendments brought down in the new bill.
Under the new amendments, real estate projects on at least 500 square meters of area or having eight flats will have to be registered with the proposed authority. Earlier, the limit was 1000 square meters and with the new bill more projects will fall under the regulators boundary.
Builders will now have to deposit at least 70 percent of the sale proceedings, including the land cost, in an escrow account to meet the construction cost. Earlier the proposal was to deposit 50 percent or less and pay the interest to the home buyers in case of any delays in the project at the same rate the builders charge. This will tilt the advantage in favour of buyers. According to the new amendment, builders will be liable for structural defects for five years, which was earlier just two years.
In the new bill cleared by the Cabinet, the carpet area has been clearly defined to add more operational spaces like kitchens and toilets. The Garage will be excluded from the purview of the apartment. While allocating the majority of units in a project, the new real estate bill will make the formation of the residents’ association compulsory. The Bill will also seek to permit the aggrieved buyers to approach consumer courts at district level, instead of only featuring the real estate regulatory authorities.
Earlier, the Centre had made a few changes to the Bill in December 2014, where the commercial real estate projects were bought under it. It also made all the provisions of the Bill applicable to all the projects, for which sales were still in progress. They also put forward a system that would require the consent of two third of the buyers for a project to change its plans.
The President of CREDAI opinioned that while the builders welcome the amendments, it should not be retrospective in nature that it would lead to delays and confusions. He also said that the commercial properties should be kept out of the boundary of the regulator.
According to the new proposals, states can set up additional benches of appellate tribunals for speedy settlement of complaints. Earlier, the Bill didn’t state any time limit in resolving the grievances filed by buyers. But according to the new Bill, the tribunals have to make a formal judgment in the cases within a time span of 60 days. According to experts, this new avatar of Real Estate Bill will boost the confidence among buyers.