Cabinet defers on the approval of Real Estate (Regulation & Development) Bill
On Wednesday, cabinet defers on the approval of Real Estate (Regulation & Development) Bill, which is committed to ensure consumer protection and to establish regulatory bodies at Centre and states for transparent and ethical business practices in country’s real estate sector. As per sources, the housing ministry has been asked to review the real estate bill explore that how it can be more consumer-friendly and to have better provisions for promotion of affordable housing.
Country’s Real Estate Sector
In review low cost housing and roof have been identified as a focus area by central government and it has promised the housing for all by 2022. Low-cost housing and roof to all have been identified as a focus area by the Narendra Modi government and it has promised shelter to all by 2022. TOI has learnt that there was a suggestion and strong argument during the Cabinet meeting that the provisions relating to Centre-state issues need to be made clearer in the bill. In current session of Parliament, central government has included the bill as one of the legislations for passage.
Recommendations in Real Estate (Regulation & Development) Bill:
The real estate bill was introduced in the Rajya Sabha in August 2014 and referred to the parliamentary standing committee for modifications and later committee had made several recommendations particularly in favor of consumers and greater check on unscrupulous developers, the housing ministry has rejected most of them. According to committee there are also several provisions in the revised bill with a single aim to protect the consumer’s interest. This has reference to recent cases in Noida where a developer had changed plans and built towers to increase economic viability without taking buyers into confidence. The real estate bill also included that the condition prohibits a developer to change the plan in a project unless 2/3rd of the allottees have concurred for such change.
As per new recommendations, now it will include checking the antecedents of project promoters before their registration is done and ensure that all real estate developers who have defaulted in two earlier cases be blacklisted. But later housing ministry has ministry rejected this by arguing that this a provision will work as a deterrent for the sector. The panel of committee had also recommended all real estate agents involved in sale of secondary market projects also need to be regulated through real estate bill. But this was not accepted. Similarly, the panel also suggested that promoters be made to enclose names of contractors, architects and structural engineers, which were also turned down.
Earlier housing ministry have allowed to builder to divert up to 50% of buyers’ investment in case of special projects to other real estate projects which are under criticism. But the original real estate bill had mandated the developer to put more than 70 per cent of the buyers’ investment to an escrow account to be used only for construction of that project.
