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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.

Will it be worthy for buyers to pay extra for this regulation or it is just an add-on expense

to their pocket in such inflation market?

Will state government be able to appoint an efficient authority?

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