New look real estate bill will help protect buyer interest
thEeRUnFiOonCcUabSinet has Now that the Union cabinet has approved the revised bill on the regulation of the real estate sector, one hopes that the country’s law makers will ensure its quick passage, paving the way for a law that’s long overdue.
Since the bill, introduced in the Rajya Sabha by the UPA government in 2013 had already been examined by the Parliamentary Standing Committee and the NDA has incorporated many of the important suggestions made by the Committee, one assumes that it will sail through without any further reference to the standing committee.
I also wish to focus on the imperative need for speed in the implementation of this law, because in no other sector has consumer interest been so severely compromised as in the real estate and construction sector. In fact in 1991, when the government set into motion the process of economic liberalization and then consciously encouraged private players in the real estate sector, its first responsibility was to institute a regulator to draw up quality, performance and ethical standards and stringently enforce them, so as to protect consumer interest.
Instead, it gave in to the builder lobby and ignored consumer interests. It facilitated private players to dominate the real estate sector and looked the other way when they adopted highly exploitative practices and rode roughshod over consumers.
The consequences are there to be seen - in the one-sided contracts that take away the rights of consumers; in the way flats are built and sold on illegal land or without legal sanctions; in the way prices are jacked up mid-way through the construction; in the inordinately delays in handing over possession; in refusals in returning the consumer’s money on failing to hand over possession; in the way plans and locations are changed at will; in the poor quality of constructions.
Finally in 2013, the UPA government addressed consumer concerns and introduced the Real Estate (Regulation and Development) Bill, 2013, and promised to make it a law before the general elections - a promise that it did not keep. Now the NDA is re-introducing the bill with some important changes.
Some of the salient features of the bill include mandatory registration of real estate projects and real estate agents, mandatory public disclosure of all project details and prohibition on the sale of projects prior to the receipt of all sanctions and approvals. To prevent diversion of funds, it proposes that 50 per cent of the money collected from the consumers be kept in a separate account in a scheduled bank and utilized only for construction of the project. It also gives the consumer the right to get a refund along with interest and compensation in case of default on the part of the builder and also a fast track President Pranab Mukherjee on Saturday inaugurated a festival showcasing the culture of India’s northeast region and highlighted the “immense contribution” made by the people of the region in nation building.
The day-long festival -- “Songs and Dances of the North East” -was organised by the Meghalaya government here and sponsored by the North Eastern Council. “The states of northeast are an important part of the country. Despite their small population, they have made an immense contribution to the nation,” Mukherjee said on the occasion.
IANS dispute resolution mechanism.
On the suggestion of the standing committee, the revised bill brings into the ambit of the regulator, not just residential real estate, but also commercial. However, it might be a good idea to begin with the regulation of only the residential real estate in the first phase and include commercial real estate only at a later stage.
The bill also bars the jurisdiction of any court or authority from entertaining complaints pertaining to real estate. Well, if the redress mechanism available to consumers under this law is really quick, impartial and effective, then obviously, consumers will prefer this to consumer courts. However, consumers should have the option to exercise that choice and the right to choose should not be taken away.