What effect will the Real Estate Regulatory Bill have on the sector?
The real estate industry has been facing a lot of challenges in the recent times. The demand for the property has dipped since many are not keen on investing at the current price point. Due to inflation, the average expenditure of a family has increased to an extent that its reducing the amount of disposable income. Adding to the woes, the RBI governor has refused to decrease the lending rate. This has added more pressure on the developers and builders.
Buyers who are looking to invest are not sure since there has been a lot of ambiguity in terms of the project duration, prices and delays over of the properties. There is a need for a powerful regulatory authority that can take care of the consumers as well as the builders. The real estate bill, which has been in the talks since December 2015, can prove to be helpful both to the buyers and builders at this stage. One of the main objectives of the bill is to help restore the confidence in buyers by taking a transparent approach. Some of the features of the real estate bill are :
- The bill is not only applicable to residential properties; it covers commercial ones also.
- It requires all states and union territories to set up a Real Estate Regulatory Authority for the purpose of regulating all the transactions in the real estate industry.
- The real estate bill also mandates complete disclosure of all the projects along with their project plan, layout, land status, promoter of the project, architects, engineers and contractors as well.
- Every builder has to deposit 70% of money raised from the buyers to be kept aside in a bank as an escrow amount that can be used to cover the costs for completing the project on time.
- Any disputers the buyers might have will be resolved on a fast track basis via adjudicating officers and the appellate tribunal.
- To make any changes to the building plan or construction, the buyer has to be consulted and they should agree to the changes that has been made.
- In case of any violations made to the real-estate laws, the bill states imprisonment up to three years for builders.
- The bill does not leave behind the benefit for builders which is the single window clearance system that will approve projects at a faster pace.
With so much in-store to provide a boost to the real estate industry, the government is looking forward to taking this bill up in parliament during the budget session. The bill has been given top priority and some of the changes that has been requested by the opposition parties has also been made giving it an advantage. Earlier, the government had set up a panel of ministers to create a bill that can be politically accepted. The bill has to be passed in Lok Sabha first and the in Rajya Sabha. Provided the houses run smoothly, the bill should get passed in both the houses during this budget session....