The much awaited Real Estate Bill, which aims to protect the interests of buyers and bring more transparency to the sector was on Thursday passed in Rajya Sabha.
The bill was first introduced in 2013 and amendments have been made to it by the present government.
The Finance Ministry in 2012 paper on black money had pointed out that the real estate sector is vulnerable to black money because of under-reporting of transactions.
Here are some important features of the bill:
Better organised real-estate sector
The real-estate sector in India is unorganised which leads to various discrepancies in the functioning. The bill will establish state-level authorities called Real Estate Regulatory Authorities (RERAs) which will regulate transactions related to both residential and commercial projects. The authority will grade the projects helping customers to make better decisions.
Timely completion and hand-over
One of the problems which buyers face is that they don’t get possession of property as promised by the seller because of delayed construction among other issues. The bill ensures that 70 per cent of the money taken from buyers has to be kept aside in a separate bank account and this money can only be used for construction activities. This will ensure that the sellers don’t invest the money received from one project into another project.
As per the bill, it will become mandatory for sellers to disclose all information like project layout, approval, land status, contractors, schedule and completion of project with customers as well as the RERA.
If the developer fails to hand-over the property to the buyer on time, then he would be liable to pay same amount as interest which he is charging from the buyer on delay in payment. Also, the property cannot be sold on the basis of ‘super area’ which includes both flat area and common area. If the developer violates the orders of appellate tribunal, then he/she can get a jail term of up to three years or penalty.
Allottees association and after-sales service
It has been made mandatory to set-up an allottees association within three months of the allotment of major units/properties so that the residents can manage common facilities like a library and a common hall. Also, if the buyer finds any structural deficiency in the property, then he/she can contact the developer for after-sales service within one year of possession. The promoters or developers cannot make any changes to the plan without consent of the buyer, the bill states.