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- all from moneycontrol:The Cabinet on Tuesday approved Real Estate Regulatory Bill that is expected to bring about a sea change in the business practice of real estate developers. Implementation of the same will take time as it involves land and land is a state subject. If you are looking to buy a property, here's how you will benefit when the Bill becomes a law:
Developers can launch projects only after getting all relevant clearances.
Developers cannot offer any pre-launch sales without the regulatory approvals.
Authorities have 15 days to approve or reject a project.
Construction to begin only after the developer's website has displayed all details of the project including receipt of clearances.
The buyers are entitled to full refund with interest in case of delay in projects.
Realty developers will have to maintain a separate bank account for every project to ensure funds raised for one project is not diverted.
It will be mandatory to keep 70% of the buyers’ funds in a separate bank account to ensure timely completion of projects.
Developers cannot take more than 10% of the advance from buyers without a written agreement.
Builders will have to use photographs of actual site for advertisements purpose. Failure to do so will attract a penalty which may be up to 10 percent of the project cost.
Repeat offenders may land in jail.Hailing the Cabinet's approval of real estate regulatory bill , realtors' body NAREDCO on Tuesday said the proposed law will bring transparency in the sector, while helping home buyers in redressal of their grievances. The Cabinet approved the Real Estate (Regulation and Development) Bill. It provides for setting up a regulator for the realty sector and having provisions like a jail term of up to three years for developers who make offences like putting up misleading advertisements about projects repeatedly.
"It is a welcome step. We had been waiting for the same since long as it would bring buyers at ease along with transparency and respect to the sector," National Real Estate Development Council (NAREDCO) President Naveen Raheja said in a statement. The proposed law will protect the interest of all stakeholders and also help check unscrupulous players in the sector, he added.
"This now would help to establish a regulatory authority for enforcing fair practice and accountability norms and fast track dispute resolution mechanism in real estate transactions," Raheja said. Commenting on the bill, global realty consultant CBRE South Asia Chairman & MD Anshuman Magazine said: "Real estate regulator bill should have been more balanced (while) taking view of challenges faced by developers and consumer grievances."
"While consumers need protection, for real estate development to happen more efficiently, and in a transparent manner, administrative reforms are required urgently," he added. The bill intends to make it mandatory for developers to launch projects only after acquiring all statutory clearances from relevant authorities. It also seeks to make it mandatory for builders to clarify the carpet area of the flat.The Cabinet on Tuesday cleared the Real Estate Regulator Bill, but did not take up the Food Security Bill, saying it will be discussed on Friday.
Sources said the Congress is likely to push for an ordinance on the Food Security Bill, despite divisions within the government. While ministers like Kamal Nath want an ordinance, others such as agriculture minister Sharad Pawar want the Bill to be discussed in Parliament. The Opposition too wants a discussion in Parliament and has been demanding that a special session be held.
Meanwhile, the Real Estate Regulator Bill may spell good news for home owners. The Bill, which the real estate sector has vigorously opposed, contains provisions for jail terms to developers who cheat buyers.
Also, builders will not be allowed to divert money paid by home-buyers to other projects.
The Bill also provides for a refund if a project is delayed. Under the proposed new law, builders will be able to sell property only after getting all necessary clearances.CommentQuote0Flag