The Union Cabinet has approved the Real Estate (Regulation & Development) Bill, 2015. The Bill will now be taken up for consideration and passing by the Parliament. In a statement the government said the Bill will provide uniform regulatory environment to ensure speedy adjudication of disputes and orderly growth of the real estate sector. “It will boost domestic and foreign investment in the real estate sector and help achieve the objective of Government of India to provide ‘Housing for All’ by enhanced private participation.” The Bill, the government says, aims at restoring the confidence of consumers in the sector by institutionalizing transparency and accountability in real estate and housing transactions which will further enable the sector to access capital and financial markets.
The salient features of the Bill are as under:
- Applicable both for commercial and residential real estate projects.
- Establishment of ‘Real Estate Regulatory Authority’ in States/UTs to regulate real estate transactions.
- Registration of Real Estate Projects (projects on at least 500 sq metres of area or with eight flats will have to be registered with the proposed regulatory authority) and real estate agents with the 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 etc.
- Deposit of specified amount in a separate bank account to cover the construction cost of the project for timely completion of the project. (deposit at least 70% of the sale proceeds, including land cost, in an escrow account to meet construction cost)
- Builders will be liable for structural defects for Five years.
- Formation of Residents Association is compulsory within 3 months of the allotment of a majority of units in a project.
- Establishment of Fast Track Dispute Resolution Mechanisms for settlement of disputes through Adjudicating Officers and Appellate Tribunal.
- Civil Courts Jurisdiction Prohibited from taking up matters defined in Bill, however, Consumer Court at District Level allowed to hear Real Estate Matters.
- Promoters barred from changing plans and design without consent of consumers.
- Provision of Appropriate Government to make rules for the matters specified in the Bill, and the Regulatory Authority to make necessary regulations.