The Union
Cabinet approved the amendments to the Real Estate (Regulation and Development)
Bill 2013. The Bill is pending in the Rajya Sabha. The Bill paves the way for
the creation of a Regulatory Authority to protect home buyers’ interests as
well as to ensure accountability and transparency. With the amendments brought in, the
provisions of the Bill are also applicable to Commercial real estate projects
as well. Ongoing projects that have not received completion certificates will
need to be registered with the Regulator within three months, as per the new
Bill.
The Bill
further envisages setting up one or more Regulatory authorities in each
State/Union Territory or one Authority for two or more States/Union Territories
by the concerned Governments.Developers
will be required to register their projects with the Regulatory authorities and
promoters will have to disclose all the information regarding the promoters,
project, layout plans, schedule of development works, land status, etc.
The proposed amendments also diluted the provision that required the promoters to
compulsorily deposit 70 percent of the amount collected from the consumers in a
separate account in a scheduled bank within a period of 15 days to cover the
cost of construction.The deposit amount
will now be only 50 percent of the amount collected.
The Bill
provides that a promoter will need the consent of 2/3rds of the consumers of a
project to change the plans/structural designs.Also, the Real Estate agents
can be punished for non-compliance of the orders of Regulatory Authorities and
Appellate Tribunals to be set up.
It
also envisages penalty for non-compliance and wrong disclosures. Regulatory
authorities will also have the power to cancel the registration in case of
persistent violations. One or more adjudicating Officers will be appointed to
settle disputes and impose compensation and interest.Appeals against
adjudicating officers and Regulatory Authority’s orders will lie with the Appellate
Tribunals to be set up and final appeals will lie only with High Courts.
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