New bill to transform realty sector
In 2013, the real estate sector is to witness transformation. Real estate (Regulation and Development) Bill which was pending since 2009 is expected to come up in the budget session of parliament in February.
The Bill will empower consumers and enforce discipline among property developers and it proposes to set up an industry regulator along the lines of the Telecom Regulatory Authority of India.
The Bill proposed that if a real estate company is developing more than 1,000 square metres of land, the company has to register the project with the proposed regulator. Real estate developers will also have to submit detailed project reports which include the land title, names of architects, completion date and agents.
The legislation proposes to make developers deposit the money generated from project sales in a separate account in a scheduled bank and ensure that the amount is not used for any other purpose.
Real Estate Bill seeks to impose strict penalties on real estate developers for various offences. If a developer fails to provide detailed project reports, the penalty may extend up to five percent of the estimated cost of the project.
A committee has been set up by the housing ministry to make the approval procedure faster and the real estate sector is awaiting the recommendations of the committee. The committee will submit a report this week after which the recommendations will take the shape of policy guidelines to be implemented by all states.
The recommendations aim to make the Indian real estate sector more transparent and bring in accountability. Currently, many home buyers invest in projects without having necessary approvals due to which the committee is also planning to make the status of project approvals online. Developers have to adjust themselves to these new regulations, otherwise it will be challenging for them to operate.
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