Tuesday, 1 September 2015

Good days ahead for home buyers with Real Estate Bill looming in near sight

Home buyers can now dream of easier and more transparent property buying process as the reinforced Real Estate Bill looms in near sight of being passed as a law. Ever since the Rajhya Sabha referred the bill for examination to a Select Committee, the chances of the bill getting passed increased. It was anticipated that this bill, which is passed by the cabinet, will be enforced as a law in the Monsoon session of the Parliament. But, due to major amendments, suggestions and revisions, it seems that the bill will be passed not before the Winter session of the Parliament.
This bill will allow the government to directly impose legal supervision on fly-by-night operators. This Bill will impose strict regulation of buyer-seller transaction. Some clauses of the bill even suggest jail and punitive terms for defaulters in realty sector. Apart from heavy fines, one notable and powerful point in favor of the public is the imprisonment clause of up to 3 years for realty defaulters. The delay in passing the bill has also been caused because the Select Committee has assessed the proposed changes in the bill and have submitting the final report just before the Monsoon session.
38 Recommendations have been put forward in the bill by the 21 member Rajhya Sabha Select Committee. Some of the powers that will be vested in the hands of the administration, and one that will relieve the burden of home buyers are-
·         Restricting realtors from investing more than 50% of the money obtained by buyers in other projects. The state government can impose a higher percentage of this restriction, but it cannot decrease the percentage in any scenario
·         Many promoters book property (apartments) in the pre-construction stage i.e even when the project is not officially registered. To tackle this, the Bill has a provision which clearly states that no promoter can sell an apartment before getting the entire project registered with the government.
·         This clause also emphasizes that the promoter will get only 10% of the apartment cost before registering and giving possession to the purchaser. This will indirectly benefit the home buyers who will get a fixed date of possession of their apartment.
·         The government has kept the interest rate of general and defaulter same, but if the defaulter keeps skipping the rates a fine of 10% of the project cost will be taken. Moreover, violations and delays may also imprison a promoter for 3 years.
·         All projects extending more than 500 sq mt will have to register the project with an appropriate regulator. Earlier the limit was 1000 sq mt. Fines will be imposed if a failure to do so occurs.

All these clauses and provisions of the bill are inclined in favor of the common man- the home buyers. The Rajhya Sabha Select Committee also imposed restrictions and provided guidelines on the dimension limitations, free space, green space, sanitation etc. The Bill was initially proposed solely for residential property but after much debate and demand, it has also been imposed on commercial properties as well.

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