The Union government on Tuesday cleared amendments to the Real Estate (Regulation and Development) Bill, 2013, paving the way for legislation on regulators for the sector.
The Bill was introduced in the Rajya Sabha in August 2013 and referred to the standing committee on urban development. Most of the panel’s recommendations have been incorporated in the amendments.
Developers, both in residential and commercial sectors, will be required to register their projects with the regulatory authorities to be set up and will have to mandatorily disclose all information regarding the promoters, project, layout plan, schedule of development works, land status and status of statutory approvals.
Under the proposed law, 10 per cent of the project cost will be imposed as penalty for non-registration and another 10 per cent of project cost or three years in jail or both if still not compliant with the rules and regulations. For wrong disclosure or non-compliance of information rules, five per cent of the project cost will be imposed. The regulators will have the power of cancelling registration in the case of persistent violations and decide on further action regarding completion of such projects.
The Bill, in the making since 2009, also mandates developers to deposit half the money collected from buyers in a project within 15 days to a separate bank account, to be used only for construction of that scheme. In the original Bill, 70 per cent of the amount had to be kept for this construction.
Ongoing projects that have not received completion certificates have also been brought under the Bill’s purview. These will need to be registered within three months. Developers will not be allowed to change plans and structural designs without the consent of two-third of a project’s buyers.
Real estate agents have also been made punishable for non-compliance with orders of the regulatory authority and appellate tribunals to be set under the proposed law.
An online system for applying to register projects is to be introduced within a year of the establishment of regulatory authorities. The regulator has to decide cases within 60 days. States will have to make rules within a year. Adjudicating officers will be appointed to settle disputes and impose compensation and interest. Appeals against the adjudicating officer and regulatory authority will be to the appellate tribunals to be set up and final appeals will only be to the high courts.