Friday, March 11, 2016

Can real estate regulatory authority cure the ailments in real estate sector?

The Real Estate (Regulation and Development) Bill, 2015, which intends to protect home buyers and bring in transparency in real estate sector, was passed by Rajya Sabha yesterday.

From now on developers have to deposit 70% of the collections from the buyers in a separate account to meet construction costs including that of land and the money would be used solely for construction purpose.

The Bill will help establish state-level real estate regulatory authorities and appellate tribunals to regulate transactions relating to both residential and commercial projects and ensure their timely completion and handover. Carpet area will form the basis for purchase of a house. Promoters will be required to register their projects with the regulatory authorities disclosing all the necessary permission for the project.

The grey area remains in case of deemed approvals. If the promoter does not get the registration approved even after one month period of submission of his approved documents for the project, then he/she will be free to market the project with the buyers with deemed approval.

V.K. Jagadish Babu, president of CREDAI Karnataka feels that the new bill will usher in credibility, transparency and trustworthiness in the real estate sector.

Builders with get an unique code once his/her project gets approved by the Real estate regulatory authority. The promoter needs to use the unique code for all the promotional material for the project including brochures and other advt. materials. From now on builders would be made accountable for all the promises made in the promotional documents to lure the buyers.

Currently real estate sector contribute nearly 9% of India's GDP and nearly 17,500 ongoing projects are running across the country. Real estate sector is the second largest employment generator in India only next to agriculture.