Is the real estate bill/property bill needed in India
Most awaited bill gets nod of both houses, but do you think it was really needed? Here is all the thing you need to know about the bill
Let’s have a short brief on Real Estate Industry and Real Estate Bill:
The real estate industry is one of the industries that have been operated in a biased
manner towards the developer community. India was facing a severe housing shortage,
rather I would say it’s still facing the shortage and on the other hand, buyers are put off
by sky-high Real Estate prices and the unscrupulous practices of many developers. So
far, the buyers were coerced to consent to single sided contract terms as created by
their builders because they did not have any other options.
With the liberalization of the economy, conscious encouragement was given to the
growth of the private sector in construction, with a great deal of success, and the sector
today is estimated to contribute nearly 6% of India’s GDP.
To overcome this unscrupulous condition, the need for a Bill concerning real estate was
felt and thus, for the first time; the Real Estate (Regulatory and Development) Bill was
first introduced by the Indian National Congress government in 2013. And surprisingly it
get passed too early as compare to other important bill such as GST and Land
Acquisition bill. But I don’t know why any government did not felt to bring such a wide
industry under any regulation for so long.
The bill covers developers, customers & real estate agents; and tried to bring things in
total transparency. It also tried to bring standardization across the country and the
positive aspect of the Bill is that the real estate agent fraternity has been made part of it.
The main purpose of the Bill is to restore the confidence of the people in the Real Estate
zone by introducing transparency and accountability in the housing markets. It is hoped
that it would encourage the flow of FDI to invest in such a organised sector. But if you
would ask me, seriously i Don’t know whether upper and lower house comprising in total
about 790 intelligent and elected people have passed a bill which will organized this
Some of the salient features of the Bill are as under:-
(a) Applicability of the Bill:
The Bill is applicable to both residential and commercial real estate;
(b) Establishment of Real Estate Regulatory Authority:
Establishment of one or more ‘Real Estate Regulatory Authority’ in each State/ Union
Territory (UT), or one Authority for two or more States/UT.
(c) Registration of Real Estate Projects and Registration of Real Estate Agents:
Mandatory registration of real estate projects and real estate agents who intend to sell
any plot, apartment or building, with the Real Estate Regulatory Authority unless and
until project size is less than 500 square meters or less than eight apartments.
(d) Mandatory Public Disclosure of all project details.
(e) Adherence to declared plans.
(f) Mandatory to deposit 70% of amount realized in separate account.
However there are always two sides of coins. There are some clauses in bill which are
practically very difficult to implement such as every withdrawal from separate account
requires Architect, Engineer and Chartered accountant approval before withdrawal from
separate account. Further compliance such as application to authority for registration,
no acceptance of deposit before entering into agreement with prospective buyer,
adherence to sanctioned plans, to obtain insurance for title of land and building and
many more harsh clauses in bill will be time consuming factor for developer. Moreover
such a compliances and requirements will make the properties more costly and it is
expected that such cost will be pass on to buyer.