After Rajya Sabha welcoming the move Lok Sabha on Tuesday (15th March) passed The Real Estate (Regulation and Development) Bill pending before the Indian parliament since 2013. The bill is intended to bring transparency and end the power balance, favouring towards realtors. This is considered as a historic move for the Realty sector with people cheering up for the expected low cost of properties.
According to the bill, the real estate company has to keep the 70% of sale proceeds in an escrow account, which is a financial instrument held by a third party on behalf of the other two parties in a transaction. It can be further utilized for land cost and construction of the related project - thus, providing the necessary relief to the investor by assuring him that his money is used in the stipulated project only.
Terming the development “historic”, Urban Development Minister M. Venkaiah Naidu asserted the new law will help bring down property prices. As the few members of the lower house objected on the limit being too high and asked it to be brought down; the concerned minister Mr. Naidu said states will have the flexibility to bring down the threshold because the situation in different states will be different.
The concerned bill calls for disposal of complaints at both appellate tribunals and regulatory authorities within 60 days, which will lead to resolving the grievances timely. The Indian government will also help to establish state-level real estate regulatory authorities and appellate tribunals to regulate transactions relating to both residential and commercial projects.
To curb the unreasonable publicity, bill has also introduced provision for imprisonment up to three years for promoters and up to one year for real estate agents and buyers in case of any violation of orders of the appellate tribunals or monetary penalties or both.
The concerned minister also assured that the government is also open to discuss with the builders if they have any issue with the bill. The minister informed that the government is certainly not against builders, the minister said, “if there are problem with the builders, I am ready to discuss it with them anytime”. Adding the speedy land clearances for the real estate projects will help in bringing down prices of the houses. “I say you will get more investment, you will get early clearances and the property prices will come down.”
The Indian Realtors body NAREDCO has hailed the passage of real estate regulatory bill by the Parliament, also saying that the new law should also have fixed the accountability of government agencies sanctioning the projects. Hailing the parliament clearance, the NAREDCO President Praveen Jain said, "The Bill seeks to protect the interest of the home buyers by enhancing transparency and fixing the accountability of developers, brokers and consumers, but it would have been more appreciated by the industry incase the accountability of financial institutions, Government and Government agencies, who have great role to play in project implementation, was also fixed".