On the concern on delay in delivery new Real Estate Regulatory Bill can be helpful
New Real Estate Regulatory Bill have reasons to enjoy end users and investors
Now with new Real Estate Regulatory Bill, which is supposed to approve in current meetings by the Union Cabinet, end users and investors have several reasons to enjoy and feel confident about property investment matters, when it comes to concern on change in project layout and delay in delivery layout among others. Real estate developers are also expected to cash the benefit with this well improved accountability and transparency as it will help them to flow the institutional funds into real estate sector.
It is expected that the number of issues between real estate developers and home buyers because of delay in project will come down as this Real Estate Regulatory Bill making it mandatory for all the real estate builders to maintain more than 50 per cent of customer advances in an account which will be known as escrow account within the 15 days of time, once they will receive the money from home buyers. However some of the real estate experts are viewing the minimum balance to maintain the proper balance in an escrow account to reduce by 50 per cent.
As per the statement Chairman & Country Head of JLL India ; Anuj Puri, “The 50 per cent mandate will be able to put the enough restriction on real estate developers to divert different funds to ensure the better completion records, whereas; the funds diversion is not only reason for delay in any real estate project completion and apart from that Real Estate Regulatory Bill need to cover the civic authorities and government bodies too. Puri more added that, this new amended Bill will have very positive affect for introducing the better governance, timely management and transparency, but non-inclusion of government authorities are the major contributors to slow down the approval processes, however they remain issue need to be addressed.
All consumers need to remember that the entire regulator will take at-least one year to turn it into reality. On Wednesday, the Union Cabinet had clear the bill, and it will become an Act once it will get tabled and approved in the current season of Parliament. For more transparency and better governance, state need to set-up the regulatory bodies with new bill while setting up a web-based online registration facility for the period of one year to set-up the governing bodies. Real estate developers are agree with current bill as it is introduced to help the transparency and better governance in real estate sector.
After that regulator will provide a log-in ID for every project, without which builder will not be able to sale the flats of apartments in the project. However the regulator should have to scrutinize all the legal documents for project, so that it can cancel the registration if they will find that project documents are not in the proper order.
Better transparency, government policy and accountability will provide the fair opportunity to home buyers and developers both and it will also help the real estate developers to gain the access to collect the funds however it will also help to lower down the property prices till certain extent. As per the statement of Shishir Baijal who is CMD of Knight Frank India, it is expected that it will enhance the credibility in real estate sector and developers as most of the developers will be in situation to borrow funds at better interest rate, which will help them to rationalize property prices in coming months.
The penal of provisions has proposed law, which will add the payment of 10 per cent of project cost for non-registration as well as payment of additional 10 per cent of project cost which will be complied for the duration of three to four years. If the disclosure of information will be wrong or it will not in the complying with the disclosures and other essential requirements and payment of 5 per cent of project cost will be imposed. The Real Estate Regulatory Bill provides the regulatory authorities to come in power so that they can cancel the project registration in certain cases of persistent violations and they will also have a power to decide on further course of action in reference to the completion of all real estate projects.
