Importance of the Real Estate (Regulation and Development) Bill

The Real Estate (Regulation and Development) Bill, 2013, provides for a uniform regulatory environment so as to protect the interests of consumers, help in the speedy adjudication of disputes arising through real estate transactions, thereby enabling the systematic growth of the real estate sector. The Bill which was long-awaited comes as a blessing to real estate buyers looking forward for measures to safeguard their interests. Moreover, it enables in promoting fair play in real estate transactions while ensuring the timely execution of projects.

Significant changes

The Bill was prepared by the Government after extensive consultations with the State, as well as various experts and stakeholders involved. Besides, it has also been supported by the States along with the Ministry of Consumer Affairs as well as the Competition Commission and Tariff Commission, among others. It also provides various provisions in bring in better transparency in real estate dealings through provisions for registration of real estate agents and real estate projects with the Real Estate Regulatory Authority. It also advocates for transparency in the functions and responsibilities of promoters and agents as well as the rights and duties of allottees. It has also enabled the establishment of the Real Estate Regulatory Authority as well as the Real Estate Appellate Tribunal in every State for the registration of all real estate projects as well as for faster dispute resolution. Besides, it has been decided to impose harsh penalties on habitual offenders so as to act as a deterrent to erring builders and developers.

Enforcing accountability and promoting growth

Previously, the real estate sector was largely unregulated as consumers were unable to procure all the information that they required so as to enforce accountability against builders and developers due to the absence of a proper regulation in this regard. The Bill, besides bringing about better accountability to consumers, will also bring about significant reduction in frauds and delays. This will enable the real estate sector to access capital and financial markets which are imperative for its long term growth. Moreover, the Bill is also expected to promote a regular and systematic growth, brought about through efficiency, professionalism and standardisation.

Major advantages of the Bill

·  The Bill will bring about standardisation in the real estate sector resulting in the healthy growth of the industry through the introduction of definitions such as ‘apartment’, ‘common areas’, ‘carpet area’, ‘real estate project’, ‘prospectus’, ‘advertisement’, among others.

·  The Bill will enable in reducing unfair trade practices which were earlier prevalent due to the introduction of the concept of ‘carpet area’ for the sale of projects, instead of the ambiguous use of terms such as ‘super area’ and ‘super built-up area’.

·  The Bill also proposes to imposes stringent penalties for non-registration of projects that may also involve imprisonment upto 3 years for continuous violations.

·  The Bill also proposes to register unregulated real estate agents while also assigning them specific responsibilities, thereby facilitating to curb money laundering considerably.

·  The Bill be also ensure consumer protection by making it mandatory for project promoters to register all projects before their sale. Besides, it would be made mandatory that they can proceed with sale of projects only after obtaining all the necessary approvals from the development/municipality authorities.

·  The Bill will also promote transparency as well as the need to stick to fair and ethical business practices in business transactions. This will ensure that all the project details as well as contractual obligations will be disclosed to the consumer.

·  The Bill will also seek to establish a real estate regulatory mechanism through a Real Estate Regulatory Authority as well as an Appellate Tribunal in the States.

·  The Bill will also infuse professionalism and planned development of the realty sector through promotional role played by the Regulatory Authority.

·  The Bill will also ensure that projects are completed on time and prevent the diversion of funds meant for completion of projects.

·  The Bill will also facilitate a speedy and specialised mechanism for settling disputes arising between promoters, buyers and real estate agents.

·  The Bill by way of opening up the sector to FDI, will enable increased contribution of the sector to growth in GDP.