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National: Draft of Real Estate Regulation Bill goes to Cabinet

 

Today the Housing Ministry is believed to take a draft of a real estate bill to the Cabinet Ministers. This is called Regulation and Development Bill 2012. It was about time the Government initiated to regulate the real estate sector in India. That is exactly its contention in the Winter sessions this year. The intention is to protect consumer interest and to improvise the process of accountability. Towards this end a regulation authority will be created by the Government and developers and builders will have to work in collaboration with the same, fulfilling the norms set in the bill, once it is passed.

 

 

Some of the key highlights of this draft are as follows:

 

  • All realty projects are to be registered. This would entail submission of architecture plans, government approvals and set timelines for completion of the project.
  • Those projects which are not registered will not be allowed to be advertised, even before it is launched.
  • Developers will have to safeguard around 70 percent of the funds received from a buyer in a separate bank account. In an event a project is not completed, this will be useful in the process of refunding a displeased buyer.
  • Taking an advance of over 10 percent is banned without signing a written agreement.
  • Builders will have to fulfill disclosure clause in order to seek permission from the regulating body to advertise the project. Violation of contractual conditions may lead to imprisonment or a fine extending to around 5 percent of the project cost.
  • The bill shall cover around 1000 sq. m. of land proposed to be developed. This value can change as per the discretion of the state.

 

While the draft of this bill presents several factors which may fulfill the aim set to reform the real estate sector. However, considering the amount of money involved, the alleged associations of many political leaders with some developers, this draft is bound to be surrounded with controversy. In this week itself the Chief Minister of Maharashtra had to put a stay on some development norms pertaining to plot development at Bandra Kurla Complex in Mumbai after eyebrows were raised regarding the benefactors of such reforms, particularly Reliance India Limited. Moreover, Kejriwal has recently commented that ‘Haryana Government is DLF’s agent.’

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