Impact of Real Estate Regulatory Bill on Indian Real Estate Market
The much awaited Real Estate Regulatory Bill 2015. which aims to protect the interests of buyers and bring more transparency to the sector was passed in The Rajya Sabha and Lock Sabha. Which will help regulate the Real estate sector and bring in clarity for both buyers and developers.
There are numerous horror stories of buyers booking flats/ Commercial Property in a project during pre-launch. only to find out later that the necessary approvals have not been obtained. Now Story is Over once it get implemented.
Here are some important features of the Real Estate Regulatory Bill 2015.
Organised real-estate sector.
Indian real-estate sector is unorganised which leads to various variances in the functioning. By the Implementation of the Real Estate Bill sector will be more organized. The bill will establish state-level authorities called Real Estate Regulatory Authorities (RERAs). which will regulate transactions related to both residential and commercial projects. The authority will grade the projects. helping customers to make better decisions.
Now Investor will Get Right information.
Builders often advertise designs and amenities of a project. only to deliver a finished product far removed from the claims. Developers will now have to return payment with interest to buyers. who are misled by statements or representations in any form? As per the bill, it will become mandatory for Builders to disclose all information. like project layout, approval, land status, contractors, schedule and completion of the project with customers as well as the RERA.
Timely completion and handover of the Projects.
Timely Delivery was the biggest issue in real estate sector. because of delayed construction. Often the reason for inordinate project delays is the diversion of funds to other projects. The bill ensures that 70 per cent of the money taken from buyers has to be kept aside in a separate bank account. And this money can only be used for construction activities. This will ensure that the sellers don’t invest the money received from one project into another project.
Alloty association and after-sales service.
It has been made mandatory to set-up an allottees association. within three months of the allotment of major units/properties so that the residents can manage common facilities like a library and a common hall. Also, if the buyer finds any structural deficiency in the property. then he/she can contact the developer for after-sales service within one year of possession. The promoters or developers cannot make any changes to the plan without the consent of the buyer, the bill states. In the case of disputes, the Appellate tribunals will have to adjudicate within 60 days and regulatory authorities will have to dispose of complaints in 60 days.
Developers will now have to sell homes on the basis of ‘carpet area’ and not the ‘super built-up area’. The latter was often misused by developers to levy additional charges for common areas. If the developer fails to hand over the property to the buyer on time. then he would be liable to pay the same amount as interest which he is charging from the buyer on delay in payment. Also, the property cannot be sold on the basis of ‘super area. which includes both flat area and common area. If the developer violates the orders of the appeal tribunal. then he/she can get a jail term of up to three years or penalty.
What else can be covered?
As we know in Real Estate Sector lots of Money involved. The builder had to take Approvals for many authorities and lots of money involved in this all documentation Process. So there should be a facility to the builders of single building clearance which will decrease. The cost of the property which has to be passed directly to the Clients.
Overall Impact Real Estate Regulatory Bill on Indian Real Estate Market.
This Bill is very good from an investor point of View. This will give confidence to the market in the short run. People might get some kind of difficulties. but once it gets implemented this bill give confidence in the market. And you will see long run sustainable Growth in the Market.
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