The Real Estate (Regulation and Development) Bill had become the need of the hour. The government realized the fact that buyer expectations were not being met by the developer community. Issues such as not getting refund after cancellations, project specifications change, and delay in apartment delivery were being faced by consumers on a day-to-day basis.
The real estate industry is one industry that has been operated in a biased manner towards the developer community. With the bill coming in place, developers will cooperate and start working within a framework conducive to both developers and buyers. The bill is supposed to make the entire transaction more transparent and fair.
What all does the real estate bill cover for increased transparency?
- Every state needs to set up a Real Estate Regulatory Authority (RERA).
- Property developers will be required to upload project details such as site as well as layout plan to authority’s website.
- Without registering with the RERA, a builder cannot sell apartments in a project.
- No structural changes can be made to the project plan without the consent of two-thirds of the buyer, which bring design-discipline in builders.
- About 50% of buyer’s money is expected to be kept in an escrow account to be used only for project construction, ensuring developers don’t divert fund from one project to another.
- A clause of “right to claim refund with an interest” has been introduced in the bill in case of failure of project delivery. This clause is expected to act as a deterrent for to cancellations and delay in projects.
A very positive point about the real estate bill is that even buyers are expected to perform their obligations as enumerated in the buyer agreement.
The reason why real estate bill was really needed was that some builders have brought disrepute to the entire real estate industry. As a result, the honest developers also get categorized in the segment of developers who don’t abide by laws and still continue to sell property to customers. The bill is expected to eliminate the black sheep of real estate industry.
The central regulation will attract the right set of real estate players. The developers will be expected to abide by laws and the ones who don’t abide by the same will not survive.