Real Estate Bill Passes Rajya Sabha Test

After months of moving from one House of Parliament to another, and from a standing committee to a select committee, the Real Estate (Regulation and Development) Bill, 2013, on Thursday became a law after being passed by the Rajya Sabha.

“This is only a regulation, not a strangulation,” tweeted Union Urban Development Minister M Venkaiah Naidu, who also said it was a “historic day for the housing sector”.

The law, which aims to set up a regulatory framework to govern contracts between buyers and sellers, will protect home buyers against faulty developers, besides bringing in investments and transparency in the real estate sector. The law provides for a three-year imprisonment for repeated flouting of rules; the promoter's liability for structural defects has been set at five years.

From now, 70 per cent of the amount realised from buyers in pre-sales of homes will have to be deposited in a separate account and used solely for funding the construction of the project for which the money was collected. Besides, an equal rate of interest will need to be paid by promoters in the event of delays and buyers for defaults.

Salient features of the Bill

Both residential and commercial real estate projects above 500 square metres and eight apartments will have to be registered

Regulatory authority and appellate tribunals will be established in states and Union territories

Adjudicating officers will be appointed by the authority to settle disputes

Real estate projects and agents who intend to sell any plot, apartment or building will have to register with the authority

The authority will act as the nodal agency and coordinate efforts for development of the sector and render necessary advice to the government

The appellate tribunal will hear appeals from the authority and the adjudicating officer

Promoters will disclose relevant project information, adhere to approved plans and project specifications, maintain honesty in the advertisement/prospectus, rectify structural defects, refund money in cases of default

A Central Advisory Council will be established to advise the central government on implementation of the Act, recommend policy, protection of consumer interest and to foster the growth and development of the sector.