DELHI: The Cabinet on Tuesday cleared the Real Estate (Regulation and Development) Bill that provides for the creation of a regulator for the sector and tighter norms for selling housing projects.
The bill seeks to provide a uniform regulatory environment to the real estate sector in the country. Builders will have to now register all projects on plots measuring 4,000 sq metres or more with a regulatory authority.
They can launch projects only after acquiring all the statutory clearances from relevant authorities. The bill also has provisions to deter builders from putting misleading advertisements related to the projects. Failure to comply with these provisions for the first time would attract a penalty, which may be up to 10% of the project cost, and a repeat offence could land the developer in jail.
Lakhs of unorganised property agents have also been brought under the purview of the authority. They will have to mandatorily register with the real estate regulator authority.
The bill also makes it mandatory for a developer to maintain a separate bank account for every project to ensure that the money raised for a particular task is not diverted to other projects. The bill provides a clear definition of carpet area and would prohibit private developers from selling houses or flats on the basis of the ambiguous term 'super area'. To help consumers settle disputes, the bill also provides for establishment of fast-track dispute resolution mechanisms through adjudicating officers, to be appointed by the regulatory authority.
Developers, however, are opposed to the bill in its current form.
"We are not against a regulator in principle, but any such bill should not be anti-development and retrograde in nature. It may be misused by people in the power to unnecessarily delay real estate projects," said Geetamber Anand, managing director of ATS Infrastructure and president elect, Confederation of Real Estate Developers Association of India.
Anshuman Magazine, chairman and managing director of property advisory firm CBRE South Asia, said: "The real estate regulator bill should have been more balanced, taking into account challenges faced by developers and consumer grievances. While consumers need protection, administrative reforms are required urgently for real estate development to happen more efficiently and in a transparent manner."