(Image source from: Real Estate Bill approved by the Union Cabinet)

Much awaited Real Estate (Regulation and Development) Bill, 2015, has been approved by the Union cabinet on yesterday the as reported by the Select Committee of Rajya Sabha. The original bill was brought by the UPA and the NDA has incorporated the committee's recommendations. The Bill will now be taken up for consideration and passed by Parliament.

The bill envisages the registration of real estate projects and real estate agents with a Regulatory Authority, mandatory disclosure of all registered projects, including details of the promoter, project, layout plan, land status, approvals, agreements along with details of real estate agents, contractors, architect, structural engineer are other features.

The bill provides for imprisonment up to 3 years for the builders in case of violations of the provisions of the proposed law and upto one year in case of real estate agents and buyers, according to a senior official of the Urban Development Ministry.

The highlights of the bill are as below:

1.    It regulates both commercial and residential real estate projects
2.    It seeks to set up Real Estate Regulatory Authority in the states and union territories to oversee real estate transactions;
3.    It makes registration of real estate projects and real estate agents with the authority, mandatory
4.    It makes mandatory disclosure of details of all registered projects, including those about the promoter, project, layout plan, land status, approvals, agreements along with details of real estate agents, contractors, architect, structural engineer etc
5.    Developers have to deposit specified amount in a separate bank account to cover the construction cost of the project for timely completion of the project
6.    It seeks to establish fast track dispute resolution mechanisms for the settlement of disputes through adjudicating officers and Appellate Tribunal
7.    The bill bars civil courts from taking up matters defined in it. However, consumer courts are allowed to hear real estate matters. More avenues for grievance redressal would mean lower litigation costs for the buyers
8.    Promoters are barred from changing plans and design without consent of consumers

“This is a step in the right direction. It will go in favour of consumers as well as developers who do clean business. If you look at markets such as the UK and Australia, they attract huge FDI in housing as they are transparent,” Anuj Puri, chairman, Jones Lang LaSalle (JLL) India, said.

"We are in favour of the regulator. We welcome the Cabinet approval. But some issues need to be sorted otherwise it will lead to more delays," said realtors apex body CREDAI President Getamber Anand.

Ramesh Nair, COO - business & international director, JLL India, said that, "An average 1,500 projects entered the system for approval each year, while only 730 OCs and 118 BCCs were granted by MCGM."

By Premji