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“Regulation in real estate is the need of the hour as certain incidents have impacted the image of the sector negatively but the Bill will not create any over-regulation,” the minister said. It will provide a necessary transparency and fair play in real estate transactions.
The real estate sector has been away from any sort of regulation till now. The United Progressive Alliance government had tabled the Real Estate Bill in the Rajya Sabha, which was later referred to a Standing Committee. In its original form, the Bill was strongly opposed by industry. The draft Bill has been revised various times since 2009, when it was first formulated. On Friday, the current government held consultations with stake holders for formulating revisions in the Bill.
"The price escalation of land and building materials has made houses increasingly unaffordable for the urban poor. Over and above, failure on the part of some unprofessional and unorganised developers in fulfilling commitments of delivery to the buyers in terms of time and quality has created mistrust among the developers and buyers," he said.
The rapid urbanisation has created huge gaps in urban housing and there is a shortage of 18 million housing units in urban areas out of which 95% pertains to economic weaker section and low income groups.
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.
It has also proposed stricter penalties and even jail term for a maximum of three years for developers. 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'.
