Executive Summary – The government has passed a new Real Estate bill which has brought in new regulations such as a separate account for 70% of the money got from buyers, quoting price for carpet area, set-up of regulatory bodies to regulate real estate projects and rules regarding penalties and punishments for the builders in case of violation of rules. The bill aims to regulate the real estate sector and make builders more accountable
Here are the important points of the bill-
Protection of Buyer's Money - In many cases, buyers do not get the property in their possession as per the timeline indicated by the builder. The bill states that 70% of the money taken from buyers has to be put in a separate escrow account and cannot be used for any other purpose by the builder except construction activities on that particular project.
Better organization of real estate sector - Builders need to get their projects registered with regulatory authorities that will be set up. These Real Estate Regulatory Authorities (RERAs) will regulate the transactions of residential and commercial projects and grade the projects so that customers know how good the project is. The builder should disclose all information such as approval status, completion status, layout details etc. These steps will help to ensure that the project is going on track, gets completed on time and handed over to the customers.The builder can start the project only after getting all statutory clearances and approvals.
The new Real Estate bill has brought in rules regarding amount received by builders from buyers, registration and regulation of properties, quoting of price for carpet area to be sold and punishment in case of violation of rules to bring more transparency and accountability in real estate sector.
The bill is a positive step towards bringing more transparency and accountability in all property related transactions and provide more support to buyers.