The Realty bill has finally become a reality. The Real Estate (Regulation and Development) Bill, 2013, was finally approved by Lok Sabha on Tuesday after the nod from Rajya Sabha. Based on this new bill now it will be difficult for the promoters and builders to delay the projects and it will provide the complete relief to the homebuyers. What is this Realty bill is all about and does this really made for the benefit of the homebuyers? Read the complete report here.
According to PTI news agency, Parliament on Tuesday had given a nod to a realty bill which will give the relief to homebuyers and it proposes an improvement of up to three years along with the monetary penalties for any violations of the rule. Five days after the Rajya Sabha approval it got passed by Lok Sabha. According to the sources, this bill is designed to protect the interest of the consumer and ensure the efficiency in all properly related transactions. Improve accountability of developers, boost transparency and attract more investments to the sector.
The report further says that the implementation of the realty bill will lead to setting up of RERA (Real Estate Regulatory Authorities) that will ensure the timely execution of the projects. The RERA will also take care of the timely transactions related to both residential and commercial projects along with timely completion and handover of the same. The proposed law will make it mandatory for all the residential and commercial projects to register them with the RERA. The above rule will be applicable to the new as well as ongoing projects. The major transformation that builder will have to face here is the deposit of 70 percent of the amount in an escrow account which will ensure the proper funds channelization.
The new bill also has set the time frame that was not there in the old bill and based on that the Appellate Tribunals will now be required to adjudicate cases in 60 days as against the earlier provision of 90 days and Regulatory Authorities will have to dispose of complaints in 60 days. The Bill has the provision for the imprisonment of up to three years in the case of promoters and up to one year in the case of real estate agents and buyers for any violation of orders of Appellate Tribunals or monetary penalties or both.
According to the Urban Development Minister M Venkaiah Naidu, the bill is designed to envisage that whatever the commitments made by the builders and real estate agents through the means of advertisement and publicity needs to be fulfilled. “That is what the purpose of this Bill,” he said. Naidu also requested the states to co-operate and expedite the implementation of the new bill, “We are trying to make the beautiful advertisements given by developers on the front page of newspapers dutiful. Our ultimate intention is to ensure consumer satisfaction. Once the Bill is notified, you will get more investments in the real estate sector, early clearances, and property prices will come down,” he said.
According to the another source, despite the realty bill has been designed to bring the transparency and accountability for the delay in projects execution it has failed to make the provision for the projects that are getting delayed due to time taken in approvals. “The Bill only has provisions for penalizing developers in case of delays beyond indicated timelines, but no distinction is made in projects that face delays because of delays in getting approvals. Although the Bill requires the Regulatory Authority to make recommendations for setting up of a single-window clearance system, no firm provision has been included for expediting the approval process,” says the credit rating company.
According to the sources, the sector has been plagued with grave issues over the years such as fraudulent practices, misrepresentations, and project delays largely because of the dominance of unorganized segment (comprising small regional developers with fragmented and unstructured operations) and lack of adequate regulatory supervision. This bill will make sure that the registrations of projects have been made mandatory for regulatory authorities.
This news bill is going to make the registration mandatory for all the projects with regulatory authority, it will have strict and fair penalty provisions, it will protect the land titles and will be focused on dispute resolutions mechanism. “The Bill is definitely a step in the right direction and is likely to restore the confidence of buyers and investors in the real estate sector over the long-term. Nevertheless, project execution and delivery are two sides of the same coin and cannot be separated, and hence, a simultaneous focus on initiatives to facilitate timely execution would be necessary to ensure faster and more effective implementation of the regulation,” the agency added.
This bill seems to be benefiting more to consumers than the developers said Mahesh Sheregar of Sunteck Realty. According to him, this is a positive move as funds will not be diverted to another project by the developers. “The Bill to regulate the real estate sector will increase transparency and discipline in the sector and it will benefit the organized players,” says Mahesh ED and CEO Sunteck realty.
However, this bill may not affect the organized players claims the Real Estate Analyst Adhidev Chattopadhyay () of Elara Cap. According to him, the organized developers such as Oberoi Realty, Godrej Projects from Mumbai and Sobha Developers, Prestige and Brigade Enterprises from Bengaluru will not have any adverse affect due to this new bill. “Organized players who have already had approvals in place prior to launch and complete projects on time would continue to do well and attract buyers. However, the smaller players or unlisted ones who do not follow the process would change the way they do business,” said Chattopadhyay.
The realty bill he is here to stay and now it is a time for the builders and developers to get straight adaptation to the new bill. There is no much option available with them at the moment. The implementation agencies will start the enforcement as soon as possible for various reasons. The bill will also open the new avenues to all those babus who wait for the chance to make sure that process is delayed and more money gets extracted from the builders. But at the end, it will be a winning game for the homebuyers. If you wish to say anything, please leave your comments and suggestions here.