Real estate regulation and development bill: Impact on Industry
jail terms. The amendments in the bill also seek to make it compulsory for all builders, to keep minimum 50% of the funds collected from the buyers in an escrow account which will meet the construction costs associated with that project.
Mr. Gaurav Yadav, CEO of UdayHomz.com says “The regulatory bill will enhance credibility of the real estate sector as the buyers’ interest will be protected. The Bill might push up property prices in the medium term because it calls for a lot of compliance. However, in the long term, the measures will help buyers. We’re awaiting the final document to understand how players like us will be impacted”
Through the amendments, the Cabinet has extended the applicability of the regulatory Bill to commercial projects also. Also, all the ongoing projects who have not received Completion Certificates will be brought under the scope of the Bill and such projects will have to be registered with a proposed regulator within three months. Another modification is that promoters won't be allowed to vary plans and structural styles unless they have consent of 2/3rd of buyers of a project. Real estate brokers, who till now had no liability, have also been made punishable for non-compliance of orders of regulatory authority.
Currently, the real estate is largely unregulated and opaque and complaints of cheating and delay in possession are rampant. But things are set to change now as Appellate Tribunals will also be set up to hear the grievances of the buyers. Also an online system will be launched for submitting the applications for registration of projects. Promoters will have to compulsorily disclose information related to the project such as promoters, project, schedule of development works, layout plan, land status, proforma agreements, status of statutory approvals, names and addresses of various real estate agents, architect and structural engineer, contractors, etc.