Sunday 27 March 2016

New Real Estate Bill & Its Benefits to Home Buyers

 The Real Estate (Regulation & Development) Bill, 2016 has been approved by the Lok Sabha on 15th of March 2016. The Bill elaborates on safeguarding consumer interest, efficient transactions related to property, enhanced responsibilities of the developers and lucidity in communications. The Bill is aspired to support both developers and consumers in order to understand the norms of property purchase and execute according to the agreement.

 Given below are the reasons why Real Estate Bill was required and its benefits to home buyers.

Why Real Estate Bill Is Required?
  • Lack of trust amongst the investors and consumers
  • Non-transparency in communication and less information about the project
  • Intrusion of fly-by-night operators who end up wasting one’s life savings
  • Fund diversions that lead to time and cost overruns
  • Consumers are exploited due to one sided agreement
  • Huge amount of black money being involved 
  • Disagreement resolutions take imprecise delay in civil courts
  • Unplanned developments due to nonattendance of regulator leads

Prime Features of the Bill:
  • Applicable to commercial and residential real estate above 500 square meters and 8 apartments respectively
  • Organizations for Regulatory Authority and Appellate Tribunal in States/UTs
  • Assigning of Adjudication Authorities by Authority in order to sort disputes
  • Mandatory registration of real estate projects and real estate agents with the      Authority if they wish to sell plot, building and apartment
  • Developers are to deposit 70% of collections in separate accounts
  • Provision for insurance of land title
  • Consumers and developers are to pay same interest rate for any delays

Benefits to the Developers:
  • To remove all the fly-by-night operators and make it easy for the genuine developers
  • The Bill will inculcate reliability by enhancing the sector on basis of securities, banking, telecom, insurance, etc.
  • Once the regulator comes into place, the long pending demand of industry/sector status can be granted. This will enable lower cost of funding for developers from various financial institutions.

Benefits to the Consumers:
  • More transparent operations giving the buyers a detailed information on their choice of project
  • Reduce unfair trade practices by disclosing the ‘carpet area’ for every project
  • Remove one sided agreement by introducing Model Agreement
  • Overruns of time and cost due to fund diversion would be restricted
  • There would be proper price control by eliminating black money and speculations
  • Eradication of indefinite delays in dispute resolution through civil courts
  • The Bill offers preventive and curative measures, and powers to enforce specific performance

  With the passing of the new Real Estate Bill, it would now be difficult for promoters and builders to delay their projects. It also endows with setting up of a Real Estate Regulatory Authorities (RERAs). This shall guarantee timely execution of projects. The RERAs will standardize transactions related to both commercial and residential projects. Therefore, the Bill will protect every home buyer’s interest, establish efficiency in every property-related transaction and also boost transparency, while attracting more investments to the sector.

 What are your thoughts on the New Real Estate Bill? Share with us in the comment section below.

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