Cabinet approves bill to regulate real estate business
10 December 2015
The union cabinet on Wednesday approved the Real Estate (Regulation and Development) Bill, 2015, a pioneering legislation aimed at providing a uniform regulatory environment, so as to ensure speedy adjudication of disputes and orderly growth of the real estate sector.
The cabinet chaired by Prime Minister Narendra Modi approved the bill as reported by a select committee of the Rajya Sabha, The bill will now be taken up for consideration and passing by Parliament.
The Real Estate (Regulation and Development) Bill is a pioneering initiative to protect the interest of consumers, promote fair play in real estate transactions and to ensure timely execution of projects.
The bill is expected to give a big boost to domestic and foreign investment in the real estate sector and help achieve the government's objective of 'Housing for All' by enhanced private participation.
The bill ensures mandatory disclosure by promoters to the customers through registration of real estate projects as well as real estate agents with the Real Estate Regulatory Authority. The bill aims at restoring confidence of consumers in the real estate sector by institutionalizing transparency and accountability in real estate and housing transactions which will further enable the sector to access capital and financial markets.
The provisions of the bill are applicable to both commercial and residential real estate projects.
The bill will promote orderly growth through consequent efficient project execution, professionalism and standardization.
The passage of the bill will enable the setting up of 'Real Estate Regulatory Authority' in states and union territories to regulate real estate transactions.
Once the regulatory authority is established real estate projects and real estate agents will have to mandatorily register with the authority.
Further, disclosure of all registered projects, including details of the promoter, project, layout plan, land status, approvals, agreements along with details of real estate agents, contractors, architect, structural engineer etc, will also become mandatory.
Real estate projects will have to deposit a specified amount in a separate bank account to cover the construction cost of the project for timely completion of the project.
The bill also provides for establishment of fast-track dispute resolution mechanisms for settlement of disputes through adjudicating officers and appellate tribunal.
Promoters are barred from changing plans and design without consent of consumers.
The matters defined in the bill are outside the jurisdiction of civil courts, however, consumer court are allowed to hear real estate matters.
The bill also provides for further legislation necessary for proper regulation of real estate activity.