The Union Cabinet approved the Real Estate (Regulation and Development) Bill in June, 2013. While the popular notion is that this was a delayed step, the consensus remains that the bill will reform the realty sector.
The primary beneficiaries of this bill will be the consumers, who have so far dealt with corruption, land mafias, red tapism, and black money in the realty sector. The bill seeks to create a Real Estate Regulatory Authority and an Appellate Tribunal that will watch over the housing sector. This will introduce greater transparency in the sale of immovable properties and protect the consumer’s interests.
Let’s delve straight into the highlights of the Real Estate Bill 2013.
Applicability of the Bill
The applicability of the bill has been limited to the residential segment of the sector, that is, housing and any unit ancillary to housing. The bill defines the terms ‘real estate project’ and ‘apartment.’
It primarily looks at a real estate project as the development of a building or building comprising apartments. On the other hand, an apartment is looked at as a self-contained and separate part of any immovable property.
Standardization of Key Terms
Besides defining the two key terms, project and apartment, the bill standardizes the meanings of various other popular and important terms, namely carpet area, common areas, prospectus, advertisement, and so on.
After defining the carpet area, the bill mandates that only carpet area be used as a parameter while selling property across India. Until now, other parameters like built-up area and super built-up area were being used, resulting in unfair trade practices.
Establishment of a Regulatory Authority and Appellate Tribunal
A Real Estate Regulatory Authority will be set up for the regulation and enforcement of the sector. It will be an authority similar to Insurance Regulatory and Development Authority (IRDA) for insurance and Telecom Regulatory Authority of India (TRAI) for telecom. It can impose punishment like imprisonment up to 3 years on developers who violate the law.
A Real Estate Appellate Tribunal comprising a sitting or retired High Court judge as its head and a judicial and administrative/technical member will hear appeals from the directions of the authority and the adjudicating officer.
Registration and Duties of Real Estate Agents
Now, agents will need to be registered. They can facilitate the sale of only those units that are registered with the Real Estate Regulatory Authority. The agents must have clear documentation and provide allottees with the necessary documents they’re entitled to possess.
Statutory Clearances and Public Disclosure of a Project
Developers will need to acquire all statutory clearances from regulatory authorities before launching a project. The clearances would need to be submitted to the regulator and featured on a website before starting the construction.
The public disclosure of all the key details of the project is also made mandatory.