The union cabinet has approved 20 major
amendments to the real estate regulatory bill 2015 that seeks to protect property
(home / flat / land) buyers as well as help investments in the real estate
industry grow.
The Union Cabinet has approved 20 major
amendments to the real estate regulatory Bill 2015 that seeks to protect property
buyers as well as help boost investments in the Indian real estate industry.
These changes are based on the recommendations of
a Rajya Sabha committee that examined the Bill pending in the upper house of
Parliament.
1. Under the amendments, projects on at least 500 square metres of area or
with eight (8) flats will have to be registered with the proposed regulatory
authority, instead of the minimum size of 1,000 square metres suggested
earlier, bringing a larger number of projects under the regulator's ambit.
2. Builders will have to deposit at least 70% of the sale proceeds, including
land cost, in an escrow account to meet construction cost, compared with the
earlier proposal for 50% or / less, and pay interest to home /flat buyers for
any default or / delays at the same rate they charge them.
3. Builders will be liable for structural defects for five (5) years, instead
of two years earlier.
4. Carpet area has been clearly defined under the new proposals to include
usable spaces such as kitchen & toilets.
5. Garage will be kept out of the purview of definition of apartment.
6. Formation of residents' association is compulsory within three (3) months
of the allotment of a majority of units in a project.
7. The Bill seeks to allow aggrieved buyers to approach consumer courts at the
district level, instead of only the real estate regulatory authorities proposed
to be set up under the Bill.
8. The regulatory bodies will mostly come up in state capitals.
9. The government had made a few changes to the Bill earlier in December 2014.
It had brought commercial real estate projects under the ambit of the Bill,
made the provisions of the Bill applicable to all projects wherein sales are
still in progress and put in place a system that would require consent of two thirds
of the buyers in a project for changing project plans.
10. The revised real estate bill includes an enabling
provision for arranging insurance of land title, which is currently not
available. This will benefit property buyers & sellers in
situations where the title of the land is held invalid.
11. The regulatory authorities will promote a
single-window system of clearances for real estate projects. This will likely speed up construction work that
now lags because of delays in getting permissions.
12. Regulatory authorities can grade projects along
with grading of promoters, besides ensuring digitisation of land records. They
will be required to make regulations within three (3) months of the formation of
the regulator as against six (6) months proposed earlier.
13. States will have to make rules within six (6) months
of notification of the proposed Act as against the one year proposed earlier.
14. Allottees shall take possession of houses /flats
in two (2) months of issuance of occupancy certificate.
14. Under the new proposals, additional benches of
appellate tribunals can be set up in a state if required for speedy
adjudication of grievances.
15. A new provision has been created for imprisonment
of up to three (3) years in case of promoters and up to one year in case of real
estate agents & buyers for violation of orders of the appellate tribunals or / monetary penalties, or / both.
Under the proposals, tribunals will have to
adjudicate cases in 60 days as against 90 days proposed earlier. Regulatory
authorities will have to dispose of complaints within 60 days. No such time
limit was indicated earlier.
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