To regulate the real estate sector, the Rajya Sabha, passed The Real Estate Bill on Thursday. This is a much awaited step, which will now definitely boost the sentiments of both buyers and developers in the real estate sector which have been lacking transparency for many years. But many of us are still confused what exactly is the real estate bill all about...So, just read on few key points to know about the real estate bill in details...
Buyers will now have to pay only for the carpet area and not the super built-up area which was loaded with confusion earlier.
The Bill will help in establishing state level Real estate Regulatory Authorities (RERAs) to regulate transactions related to both residential and commercial projects and ensure their timely completion and handover.
The developers will now have to take consent of 66% of the home buyers in case they have to increase the number of floors or change the building plans. This will protect the buyers from any ad-hoc changes that are a rule presently.
Appellate Tribunals will now be required to adjudicate cases in 60 days as against the earlier provision of 90 days and Regulatory Authorities to dispose of complaints in 60 days while no time frame was indicated in earlier Bill.
The Bill provides imprisonment of up to three years in case of promoters and up to one year in case of real estate agents and buyers for any violation of orders of Appellate Tribunals or monetary penalties or both.
Now, minimum of 70 per cent collections from buyers should be deposited in separate escrow account to cover cost of construction and land. This is a big relief for home buyers as developers usually use gather money from one project to fund the other.
The Buyers will be mandated to register their projects and agents with the regulator in their area.
The Bill has introduced a mandatory disclosure of projects, which includes details of the promoter, project, land status, clearances, approvals, etc. to increase the credibility of developers and protect consumer rights as well.
Also, both buyers and developers will pay the same rate of interest in case the buyer delays payment or the developer delays giving possession. Earlier, the Buyer-Seller Agreements were heavily tilted towards the developers who used to pay very little penalty in case of delay in giving possession.
The Bill has introduced an insurance of the land title. This insurance is to benefit consumers if the land titles are found to be defective.
Now, for any structural defects in the property the period is increased from 2 to 5 years for the developers to be held responsible. Developers will not be able to change the plans without the permission of two-third buyers. Home buyers just have to inform the developer of the problems within one year of the purchase.