The Central Government cabinet approved the long pending RE Bill paving the way for providing the much needed transparency in housing sector in India. The Bill applies on all projects over 4000 sq m in size and seeks to cover all major private residential developments across the country
By imposing strict regulations on the Promoter, the Bill looks to ensure that construction is completed in a timely manner but and as per the specifications promised. Further, by seeking to establish the Regulatory Authority and the Appellate Tribunal, it aims to create a dispute resolution mechanism and provide a specialized forum for hearing disputes related to property matters.
The Bill also seeks to prevent developers from putting out misleading advertisements. They also need to clearly mention the sanctions and approvals they have obtained and cannot market the project unless the necessary approvals are in place. All plans, approvals need to be put up by the developer on the Regulator’s website.
The developer needs to set aside 70% or less percentage in a separate account which shall consist of the monies collected from the allottees and this amount shall be utilized only towards the particular project and cannot be diverted. The developer is required to declare the time frame for developing the project and has to adhere to such timelines. While it aims to hold the developers accountable, it also ensures that the allottees do not default in making payments. Thus, by providing penalties for both the promoters and the allottees, the Bill seeks to ensure that non-compliance is minimal.
The category of real estate brokers has also been brought under the ambit of this Bill by making their registration mandatory when the promoter provides the project details to the Authority. The Bill also seeks to define the carpet area which shall be a standard definition across the country. It will provide model Agreement to Sell under which the promoter is liable to furnish the necessary project details to the allottee.
Though the Bill will turn out to be a boon for the property purchasers and the consumers, it has received a lot of criticism from developers for not being inclusive in its approach towards them. The Bill in its current form does not provide for any relief to the developers in terms of getting through the cumbersome approvals and permissions from the multi-headed Government agencies in an expeditious manner. The issue of the need for a single-window clearance to cut through the red tape also does not find any mention in the Bill.
Anuj Puri, Chairman & Country Head, Jones Lang LaSalle India