To Protect Property Buyers, Union Cabinet Clears India
Real Estate Bill, 2015
India Real Estate (Regulation & Development)
Bill, 2015, provides uniform regulatory environment to ensure speedy
adjudication of disputes & orderly growth of the real estate sector and thereby
protect the interests of property (Land and home / flat buyers who face a
number of problems in the process of procuring home.
Escrow account..!
The Union Cabinet today approved various
amendments to the contentious Real Estate Bill, 2015 introducing provisions for
depositing 70% of the project cost by builders into an escrow account and
punishment for violations of the proposed law, meeting key opposition demands.
Reaching out to the opposition, the Cabinet, in
its meeting chaired by Prime Minister Mr. Narendra Modi, approved a string of
amendments to the Real Estate (Regulation and Development) Bill, 2015, aimed at
protecting the interest of the buyers and promoting investments in the sector
while ensuring transparency.
A key amendment is the provision for depositing
70% of the money received by the builders from buyers for a project into an
escrow account, especially created for the concerned scheme, so the builders do
not invest a large portion of the money thus raised for other projects.
It would also act as a safeguard against
uncertainty over a project in the event of the builder backing out.
The real estate bill approved by the previous UPA
government had provided for deposit of 70% of the funds raised from buyers into
the escrow account but it was reduced to 50% by Rajya Sabha’s select committee
which examined the bill.
Imprisonment 3 years for the builders
The amended bill also provides for imprisonment
up to 3 years for the builders in case of violations of the provisions of the
proposed law and upto one year in case of real estate agents and buyers,
according to a senior official of the Urban Development Ministry.
The UPA bill had a penal provision for
violations, which was not there in the one brought by the Mr. Narendra Modi
government.
The Congress-led opposition had been insisting on
reintroduction of these provision in the amended bill.
Today’s decision has significantly improved the
prospects of the bill getting passed during the current session provided
Congress allows normal functioning of Parliament.
Default or Delays..!
Another major change approved by the Cabinet
includes equal rate of interest to be paid by promoters & buyers in case of
default or delays. The provision was earlier tilted in favour of the builders.
The bill envisages registration of real estate
projects & real estate agents with a Regulatory Authority, mandatory
disclosure of all registered projects, including details of the promoter,
project, layout plan, land status, approvals, agreements along with details of
real estate agents, contractors, architect, structural engineer are other
features.
Property Buyers Can Approach Consumer Courts..!
Aggrieved buyers can now approach 644 Consumer
Courts which are available at district level in the country instead of only the
Regulatory Authorities proposed to be set up under the bill, mostly in capital
cities, for redress of grievances. This makes it easy for buyers besides
reducing the litigation costs.
The earlier NDA bill provided for resolution of
disputes between consumers & builders by consumer court, while the UPA
legislation stipulated dispute resolution at the appellate body of the proposed
real estate regulator.
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