With the Cabinet approval of the Real Estate (Regulation and Development) Bill, 2015 things like project delays and realty corruption could be a thing of the past. The Union Cabinet approved of nearly 20 amendments in the Real Estate Bill, the chief among them being the creation of an escrow account where 70% of the sale proceeds from builders will be deposited. By declaring a punishment for all those buyers who default on this clause, the Bill will provide the consumers a much required umbrella of protection.
The Real Estate Bill also provides for the creation of Real Estate Regulatory Authority or RERAs in all the states and Union territories once it becomes an Act. The responsibility of implementing the reforms ushered in by the Bill will then fall on each state. And it goes without saying, that if the implementation is effective, the real estate sector of the country will witness some drastic positive changes in terms of transparency and regulation of defaulters.
The RERA will take into account all real estate projects, whether residential or commercial and it will become mandatory for all real estate agents to register themselves with the Authority. The projects that will be registered with RERA will have to disclose all details including the layout plan, promoter information, approvals and agreements, status of land as well as details about the contractors, agents, engineers, etc.
While these measures, if implemented properly, will raise the reputation of the Indian realty market amongst buyers and boost their crumbled confidence, many feel that the Bill should also take into its hold the government and local urban authorities, which are more often than not, responsible for delays in project completion. This will prevent the builders from facing the flak if the delay is due to a setback in granting approvals, licences or permits.
The proposed Real Estate Bill will definitely safeguard home buyers from unethical builders and developers due to whom the entire real estate sector bears a sour reputation. Hence this Bill is hoped to restore that lost tainted reputation of the sector and will encourage buyers to invest again without any negative apprehensions. Shishir Baijal, CMD, Knight Frank India is positive about the passing of the Bill and feels that “the amendments made in the Bill are likely to lift overall sentiments. The amendments are in the right direction, but it should be implemented within the time frame.”