Decks have finally been cleared—let us hope—for regulating the real estate sector through a legislation that had been held hostage by vested interests for years. The Select Committee of Rajya Sabha, which examined the Real Estate Bill 2013, submitted its report last week. The amended draft of the Bill, based on the report of the parliamentary committee, will be placed before the Cabinet during its next meeting. After Cabinet approval, it will be re-introduced on the floor of the House. The 21-member committee headed by BJP MP Anil Madhav Dave was constituted after protests by Opposition parties over the issue of NDA government watering down several provisions of the original Bill. The fact that the amended bill has the support of all opposition parties should make its passage by both the Houses of Parliament easier.
The need for regulating the real estate sector has been felt for long. The bill bridges the gap between promoters who have knowledge of market practices and thus more bargaining power, and first-time home purchasers who tend to be rather green behind the ears. The comprehensive procedural requirements envisaged in the draft cleared by the parliamentary panel are intended to bring transparency, uniformity and organisation into an otherwise unorganised sector. Strong penalties for defaulting promoters, such as imposition of a fine of 5 per cent of the project cost, and deregistration of a project, should ensure better compliance. Home-buyers, who until now were left with no choice but to sign on the dotted lines of an agreement drafted by developers, will now have a Central government issued Model Draft Agreement to fall back on.
By requiring developers to adhere to registration and disclosures on each and every project, imposing penalties for delays and default, and establishing state-level Real Estate Regulatory Authorities for aggrieved buyers to seek redress, the Bill lays down some basic ground rules in a sector where there were none. Now that the RS committee has made its recommendations, the government should accept them without delay to ensure early passage of the legislation. Home buyers today have no protection. Once Parliament passes it, the law will bring succour to those whose only recourse until now was pursuing civil, consumer or criminal cases in the courts