The Bill and a uniform regulatory mechanism across the country are aimed at protecting property buyers' interest by bringing in much-needed transparency and accountability into the sector.
Through the amendments, the Cabinet has extended the applicability of the Bill to commercial Real Estate
also. Ongoing projects that have not received Completion Certificates so far have also been brought under the purview of the Bill and these projects need to be registered with the Regulator within 3 months, the Union government said in a release.
One of the major modifications to the Bill is not to allow promoters to change plans and structural designs without the consent of 2/3rd of consumers of a project.
The Bill also seeks to make property brokers accountable as they have also been made punishable for non-compliance of the orders of Regulatory Authority and Appellate Tribunals to be set under the proposed law.
The Bill, which was first introduced in Rajya Sabha in August 2013, seeks to ensure accountability and transparency that in turn will enable the realty sector to access capital and financial markets essential for its long term growth. Efforts have been on since 2009 for creating a regulatory mechanism for the real estate sector on the lines of other regulatory bodies for other sectors such as insurance and telecom.
Developers are expected to register their projects and disclose all relevant information including schedule of development works, land status, status of statutory approvals, pro-forma agreements, names and addresses of real estate agents, contractors and architects with the Regulatory Authorities to be set up and comply with the same.
Builders will now not be able to divert funds of their projects as they will have to deposit 50% of funds collected from buyers within 15 days in a separate bank account to meet construction costs. This provision of 50% has been made after taking into account the cost of land needed to be acquired before announcing a project.
Under the other new stipulations approved by the Cabinet, States will have to make rules within a year, rank of adjudicating officer has been elevated to that of District Judge, web based online system for submitting applications for registration of projects to be introduced within one year of the establishment of Regulatory Authorities and Regulator has to decide cases within 60 days.