Oppn backs bill in RS for a single realty authority
Pro-consumer bill set to sail through LS, may revive sector
A law to shield property buyers from unscrupulous realtors and regulate the real estate sector could soon become reality after the Rajya Sabha passed the Real Estate (Regulation and Development) bill on Thursday.
The Congress and all major opposition parties except the AIADMK supported the bill that is likely to boost the flagging sector. The legislation is likely to sail through the Lok Sabha on Monday due to the NDA’s commanding majority.
Once the bill comes into effect, developers and agents will have to register all commercial and residential projects — coming up on land of 500 square metres or eight apartments — with state-level real estate regulators before launch.
The bill makes it mandatory for developers to deposit 70 % of the money collected in an escrow account so that construction isn’t stalled for lack of funds. In an earlier version of the bill, the ceiling was fixed at 50 %.
“Real estate bill will renew investors’ confidence and ensure timely completion of projects and create more opportunities. It is the need of the hour,” housing and urban poverty alleviation minister M Venkaiah Naidu told the Rajya Sabha.
In case of construction delays, promoters will have to pay consumers. If buyers default on payment, they will also be fined. The rate of interest in both cases will be the same.
Developers will have to disclose all project information, including a detailed layout plan, land status and status of approvals to the regulator.
Any failure or deviation will invite a penalty of up to 10 % of the project cost, jail term of up to three years for promoters and up to one year for agents.
“It [the bill] brings in only a regulation and not strangulation. This bill is not against anyone,” said Naidu, who is piloting the bill.
India’s 12 lakh crore realestate sector is largely unregulated where delays of several years in hand-over and overshooting of project costs are common.
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