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The government plans to revise the Real Estate Regulatory Bill, 2013, aiming to have increased participation from the private sector.
Minister for Urban Development and Housing and Poverty Alleviation Venkaiah Naidu today said the earlier Bill has lapsed and the government is looking to revise the Bill by incorporating suggestions from the various states and the industry.
"We have heard views of various states and already had a meeting with CREDAI (real estate industry association) on this and will be meeting industry chambers FICCI and Assocham soon. Private participation of private sector is important," Naidu said.
We also need to have an accountability mechanism wherein private developers would be responsible for creating basic infrastructure around the project area, the minister added.
He, however, did not give any timeframe for the formulation of the revised Bill.
The Real Estate Bill, 2013 was introduced in Rajya Sabha in August last year during the regime of UPA II and was referred to Standing Committee on Urban Development.
Earlier, the draft Bill has been revised various times since 2009, when it was first formulated.
The industry has been opposing the introduction of the Bill. They have raised concerns over strict penalties/punishment to be imposed on developer if they fail to comply with certain provisions. It also makes it mandatory for developers to launch projects only after acquiring all the statutory clearances from relevant authorities.
The Bill is aimed at providing regulation in the sector, besides protecting buyers from erring developers and usher in an era of transparency. The real estate sector has been away from any sort of regulation till now. It has also proposed stricter penalties and even jail term for a maximum of three years for developers.
The development assumes significance in the wake of rising consumer complaints against developers for delaying projects by over 4-5 years, with no mechanism to curb the delays. On the contrary, if a buyer defaults on payment, he has to pay high interests while developers escape through loopholes in the sale agreements.
The Bill, which has been in the making for about five years now, also mandates developers to keep aside about 70% of the collected amount from buyers in a separate account. Besides, it has certain tough provisions to deter builders from putting out misleading advertisements related to the projects carrying photographs of actual site. Failure to do so for the first time would attract a penalty which may be up to 10% of the project cost and a repeat offence could land the developer in jail for a maximum of three years. It provides for a clear definition of the 'carpet area' and would prohibit private developers from selling houses or flats on the basis of ambiguous 'super area'.
