How Would The Real Estate Bill Help Home Buyers?

The opposition parties have long been accusing the Real Estate Bill of being pro-builder. But, the Bill is more likely to protect the interests of home buyers. With the Real Estate Bill, India's real estate sector will be governed by a proper regulatory framework for the first time.

Here are some ways in which the Real Estate Bill would help home buyers:

• Builders will be held accountable for structural defects: For long, home buyers have been paying through their nose for apartments, though they have little control over its quality. If an apartment is defective, structurally or otherwise, the onus is on the owner to make changes, complying with the rules of the society. But, the society has the right to decide the amount of money to be spent on renovation and repair. This does not leave the owner even the option to protest. But, the Bill would make builders accountable for the quality of construction. Builders will be asked to rectify the structural defects in a building, and this will be seen as a part of the duties of the promoter.
• Builders will be held accountable for construction delays: Delays in construction of residential projects in India is the single biggest problem that real estate investors face. But, if the Real Estate Bill becomes valid, builders will have to compensate allottees if there are delays. Promoters will also be held accountable for the claims they make in advertisements and brochures. This will force builders to set realistic deadlines, and communicate this effectively to the buyers. The builder, however, will not be responsible for the delays that occur because they did not receive clearances from the government agencies on time. So, the Bill will be more of a boon for people who bought apartments in under construction projects in India.
• The Bill will regulate real estate agents and brokers: Real estate agents and brokers often lure home buyers with empty promises. Since brokers of an area are part of a cartel, and can easily bully the home buyers, few take on them. This will change. The Bill stipulates that agents should register with the regulator. Builders are expected not to work with unregistered agents. The properties brokers list too should be registered with the regulator. They will also have to maintain books of accounts, records and documents. The brokers who engage in unfair trade practices will be punished. This will eliminate fraud to a large degree.
• Builders will be expected to disclose project details: The builder will be expected to disclose all information that is relevant to a project. The details builders must disclose include the names of promoters and the project, layout plan, plan of development works, land status, status of statutory approvals and disclosure of proforma agreements, names and addresses of real estate agents, contractors, architects and structural engineers. This would ensure that the information available to the consumer is authentic. There would be greater transparency in the real estate sector. In the government's words, the real estate sector “is largely unregulated and opaque, with consumers often being unable to procure complete information, or to enforce accountability against builders and developers in the absence of effective regulation.”

(Katya Naidu has been working as a business journalist for the last nine years, and has covered beats across banking, pharma, healthcare, telecom, technology, power, infrastructure, shipping and commodities)