To protect the interests of buyers , Rajya Sabha clears Real Estate Bill

The Rajya Sabha approved the Real Estate (Regulation and Development) Bill that promises muchdelayed clean-up of an industry that routinely delays the delivery of homes for years, forces buyers to accept shoddy construction, escalates costs without good reason and leaves customers without any recourse to timely redress when promises are broken. The Bill will go to the Lok Sabha and then for presidential assent before becoming law, a process that's expected to be smooth unlike other reforms that have got stuck in the Upper House. The legislation bars developers from advertising and selling homes in projects until they have obtained all approvals from local authorities. 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. It calls for disposal of complaints at both appellate tribunals and regulatory authorities within 60 days, thereby setting a timeline for resolution of disputes. As a rule, promoters will be required to register projects with the regulatory authorities disclosing project information including details of promoter, project, schedule of implementation, layout plan, land status, status of approvals, agreements along with details of real estate agents, contractors, architects, structural engineers etc. Naidu said that this will enable transparency, accountability and timely execution of projects. It also mandates that builders deposit 70% of money collected from buyers in an escrow account that will be utilized only for construction and paying for land, putting an end to the widespread diversion of funds to other projects. According to data from property research firm Liases Foras, a third of more than 25 lakh apartments launched between 2008 and 2014 were delayed by at least a year. The delays have led to several home buyers agitating against builders over the last few years. To bring more projects under the ambit of the proposed regulators, the Bill says all projects on land more than 500 sq metres or having eight apartments will have to be registered with them. The Bill says the developer will have to pay the same penal interest rate for delays as the buyer does. Currently, this is heavily skewed against the buyer. The real estate sector, with over 76,000 companies, needs a regulator urgently, Urban Development Minister Venkaiah Naidu said in the Rajya Sabha, pointing to the telecom sector, which has a watchdog agency with only a handful of operators.

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