Congress helps pass real estate bill In Rajya Sabha
10 March 2016
The opposition Congress party today changed its obstructionist tactics, perhaps for the first time since the new government came to power, helping pass the Real Estate Bill in the Rajya Sabha.
The Real Estate (Regulation and Development) Bill aims at regulating India's murky real estate sector and protect home buyers from real estate developers who fail to deliver on time.
The Congress, the main opposition party, had shown renewed interest in getting the proposal cleared by Parliament and the government had hence fast-tracked the proposal, so that at least one bill could be passed in the Budget Session.
The Congress had, last week, written to the PM, asking for the bill to be prioritised in this session of Parliament. Congress vice president Rahul Gandhi had promised home buyers that his party will support the bill.
The version that the government submitted for discussion included as many as 20 amendments or changes, based on the feedback of a parliamentary committee. The first version of the bill was rejected by the Rajya Sabha last year.
Moving 'The Real Estate (Regulation and Development) Bill, 2015' for consideration and passage, urban development minister M Venkaiah Naidu said it aims to protect the interests of buyers and bring more transparency in the sector.
The bill, which is to be applicable retrospectively, makes it mandatory for residential and commercial projects to be registered with a real estate regulator which will monitor transactions and settle disputes.
Builders will have to mandatorily deposit at least 70 per cent of money collected from buyers during pre-sales, including land cost, in an escrow account to meet construction costs, compared with the earlier proposal for 50 per cent. This will ensure that developers who run out of cash don't stall projects. Builders would have to pay interest to home buyers for any default or delays at the same rate they charge them.
Also, builders will be liable for structural defects for five years, instead of two years as proposed earlier. They will also have to pay interest to home buyers on delays at the same rate that customers would be charged if they defaulted on payments.
In recent years, several projects have been delayed, leaving home buyers in the lurch with no protection.
The new bill covers a larger number of projects for registration - any project that includes eight flats or 500 square come under its purview.