Monday, 10 June 2013

Real Estate regulatory bill 2013 to bring more transparency

Cabinet passed the Real Estate (Regulation and Development) Bill, 2013,  which makes the various parties involved in the real estate sector be accountable for their actions.

The bill proposes the establishment of a Real Estate Regulatory Authority in each State / Union Territory. In some cases two or more states / union territories can be under a single authority. This authority will work as a nodal agency for the development of the real estate sector and ensure transparency, efficiency and competitiveness.

The emphasis is in transparency. Every project with more than 4,000 SqM, (approximately 40,000 Sqft or 92 Cents) needs to be registered with the Regulatory Authority. A notable point is that the developer is supposed to maintain a separate account with a scheduled bank for each project. As much as 70% of the funds received from allottees needs to be in this account to cover the construction costs. This is to prevent siphoning out the payments received for one project into another project. The builder is supposed to make public details of promoters, project & layout plan, land status, carpet area, number of apartments booked, its registered real estate agents, contractors, architects, structural engineers etc.

The bill calls for a Fast Track Dispute Settlement mechanism for the settlement of disputes. An appellate tribunal will be formed to hear appeals from the orders of the Real Estate Authority and the adjudicating officer of the dispute settlement mechanism.

While the allottee has the right to information related to status of the the project and refund with interest in case of default by the promoter, it is their duty to make the payments and complete obligations as per the agreement.
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