 "What the Real Estate Bill means for you and me")
Finally, some good news coming out of Parliament with the upper house clearing the Real Estate Bill.The real estate sector will get a much needed regulator that will bring in some discipline to a sector, known more for its bad trade practices. The sector, blamed for its opaque practices, high handedness, and generation of black money is now expected to be regulated at the state level.
Here are five key highlights of the Real Estate Bill
1) Projects by builders will now have to be registered with the regulator and details of the project like layout plan, land status, approvals and agreements status and the agents who are going to sell the project will have to be submitted. In other words, the authority will seek all details of the project to get an idea that the project has been thought through and will reach its logical conclusion.
2) The problem that most incomplete projects currently face is that builders divert the funds collected from prospective house owners and use it for some other projects. This has been tackled by asking builders to deposit a minimum of 70 per cent collections from the buyers in an escrow account to cover cost of construction and land. This will once again ensure that a major part of the project is completed. Monitoring and ensuring timely completion will be under the aegis of state-level Real Estate Regulatory Authorities.
3) Another loophole has been tackled by disallowing pre-launch process without getting all approvals in place from the local authorities and without obtaining registration from the regulator. The good news for exiting house owners who are stuck with incomplete projects is that even their project will now come under the purview of the new regulation.
4) Faulty advertisements and mis-selling has also come under the scanner as builders can no longer put flashy designs or photographs of a project to attract buyers if the final project does not match the photographs. In case of a mismatch, the builder has to return the payment with interest to buyers.
5) Home owners can verify the quality of the builders since the bill now makes it mandatory for developers to provide details of projects launched in the past five years, both completed or under-construction. These will also be available on the regulator's website.
