A bill seeking to regulate the real estate sector, bring in transparency and help protect consumer interests was passed by the Rajya Sabha on Thursday.
Moving 'The Real Estate (Regulation and Development) Bill, 2015' for consideration and passage, Urban Development Minister M Venkaiah Naidu said it aims to protect the interests of buyers and bring more transparency in the sector.
The Congress had extended its support to the Bill, which was passed by a voice vote in the House. It is touted as a major reform measure to regulate the vast real estate sector and bring order in it.
Here are highlights from speech by MP Rajeev Chandrasekhar, who is the member of the Select Committee:
1. The Bill ensures the timely completion and delivery of flats to the consumer. Currently, when a consumer buys a property that is under construction, he is promised the delivery of the flat within one to two years after registration. In practice, however, the delivery of the flat is almost never made within the agreed upon timeline.
a. This Bill solves this problem - it ensures that strict regulations will be imposed on developers to ensure timely construction and delivery. It further provides that consumers are entitled to a full refund with interest, if there has been a long delay in the delivery of a flat.
2. Bill has put in place a robust mechanism for the publication of accurate project details and disclosures. No one can deny that in the past, there have been myriad instances in which developers have put out misleading promotional material with regard to amenities provided by projects at an under construction stage, for consumers to discover that none of these have been provided for in the final product.
a. Section 11(3)(a) of the Bill mandates that developers need to share final project plans as part of their disclosure terms, with no room for iterations. Further, Chapter VIII of the Bill also imposes a 10% project cost penalty and upto 3 years in jail. These add a much needed degree of accountability and also protects consumers from this highly prevalent malpractice.
3. Bill provides that developers must mandatorily mention the actual carpet area of projects to the consumers. Thus far, developers have typically sold properties by citing super built area. This includes common passage area, stairs and other areas which make up to 30% of the actual area of the property being sold. Consumers are not usually informed about the actual carpet area of the flat. By mandating that the carpet area be explicitly mentioned through section 4, this Bill is ensuring that even the most undiscerning consumers are thoroughly informed.
4. Bill ensures that all clearances are completed before the launch of a project. Sections of the Bill mandate that developers have to receive all clearances before issuing their properties for sale. Most builders offer flats at huge discounts at the pre-launch stage to attract buyers - but without informing consumers about the status of clearances and potential delays in delivery.
5. Bill mandates that developers are bound to provide after sales service for properties found to have structural defects, at no extra cost to the consumer. Under the Bill, buyers are simply required to inform the developers of the deficiency within one year of purchase.