The Union Cabinet approved amendments to the long pending Real Estate (Regulation and Development) Bill, 2013.
The Bill provides for a uniform regulatory environment, to protect consumer interests, help speedy adjudication of disputes and ensure orderly growth of the real estate sector. The Bill contains provisions of registration of real estate projects and registration of real estate agents with the Real Estate Regulatory Authority; functions and duties of promoters and allottees; establishment of Real Estate Regulatory Authority; establishment of fast track dispute resolution mechanism through adjudication; establishment of a Real Estate Appellate Tribunal; offences and penalties etc.
The Bill ensures mandatory disclosure by promoters to customers through registration of real estate projects as well as real estate agents with the Real Estate Regulatory Authority and attempts to institute transparency and accountability in real estate and housing transactions.
The salient features of the Bill are as under:-
(a). Applicability of the Bill:
The proposed initial Bill was applicable for residential real estate. It is now proposed to cover both residential and commercial real estate;
(b). Establishment of Real Estate Regulatory Authority:
· Establishment of one or more ‘Real Estate Regulatory Authority’ in each State/ Union Territory (UT), or one Authority for two or more States/UT, by the Appropriate Government for oversight of real estate transactions,
· To appoint one or more adjudicating officers to settle disputes and impose compensation and interest;
(c). Registration of Real Estate Projects and Registration of Real Estate Agents:
Mandatory registration of real estate projects and real estate agents who intend to sell any plot, apartment or building, with the Real Estate Regulatory Authority;
(d). Mandatory Public Disclosure of all project details:
Mandatory public disclosure norms for all registered projects such as details of promoters, project, layout plan, plan of development works, land status, status of statutory approvals and disclosure of proforma agreements, names and addresses of real estate agents, contractors, architect, structural engineer etc.;
(e). Functions and Duties of Promoter:
· Disclosure of all relevant information of project;
· Adherence to approved plans and project specifications;
· Obligations regarding veracity of the advertisement for sale or prospectus;
· Rectify structural defects;
· Refund money in cases of default;
(f). Compulsory deposit of 50 percent:
To compulsorily deposit 50 percent (or such lesser percent as notified by the Appropriate Government) of the amounts realized for the real estate project from the allottees in a separate account in a scheduled bank within a period of fifteen days to cover the cost of construction to be used for that purpose;
(g). Adherence to declared plans:
· To bar the promoter from altering plans, structural designs and specifications of the plot, apartment or building without the consent of two-third allottees after disclosure;
· However, minor additions or alterations permissible due to architectural and structural reasons;
(h). Functions of Real Estate Agents:
· Real estate agents to sell properties registered with the Authority;
· Maintain books of accounts, records and documents;
· Not to involve in any unfair trade practices;
(i). Rights and Duties of Allottees:
· Right to obtain stage-wise time schedule of project;
· Claim possession as per promoter declaration;
· Refund with interest and compensation for default by the promoter;
· Allottees to make payments and fulfill responsibilities as per agreement;
(j). Functions of Real Estate Regulatory Authority:
The Authority to act as the nodal agency to co-ordinate efforts regarding development of the real estate sector and render necessary advice to the appropriate Government to ensure the growth and promotion of a transparent, efficient and competitive real estate sector;
(k). Fast Track Dispute Settlement Mechanism:
· Fast track dispute resolution through adjudicating officers (District Judge);
· Appellate Tribunal to hear appeals;
(l). Establishment of Central Advisory Council:
To advise the Central Government on implementation of the Act, recommend policy, protection of consumer interest and to foster growth and development of the real estate sector;
(m). Establishment of Real Estate Appellate Tribunal:
Real Estate Appellate Tribunal to hear appeals from orders of the Authority and the adjudicating officer. The Appellate Tribunal is to be headed by a sitting or retired Judge of the High Court, with one judicial and one administrative/technical member;
(n). Punitive Provisions:
Punitive provisions including de-registration of the project and penalties in case of contravention of provisions of the Bill or the orders of the Authority or Tribunal;
(o). Bar of Jurisdiction Courts:
Provision for barring jurisdiction of court and any authority from entertaining complaints in respect of matters covered under the Bill;
(p). Power to make Rules and Regulations:
· Appropriate Government to have powers to make rules over subjects specified in the Bill;
· Regulatory Authority to have powers to make regulations;
The Bill aims to protect consumers and curb “black money” . “The bill seeks to ensure accountability and transparency, which will in turn enable the real estate sector to access capital and financial markets essential for its long-term growth,” the government said in a statement.