The Real Estate Bill, pending before parliament since 2013, which aims to protect the interests of property buyers from unscrupulous promoters and regulate the real estate sector. was on Thursday approved by India's upper house of parliament
New Delhi: A bill seeking to regulate the real estate sector, bring in transparency and help protect consumer interests was passed by the Rajya Sabha today.
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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.
"The Bill is need of the hour," Naidu said, responding to clarifications by members saying it can see further changes in the coming times. He also sought the support of AIADMK members, who had opposed the measure.
He said the bill would prohibit unaccounted money from being pumped into the sector and as now 70 per cent of the money has to be deposited in bank accounts through cheques.
"There will be no discrmination of any kind on basis of religion, region, caste, creed or sex and gender and we will include that in the rules," Naidu said, responding to members' clarification, adding "there has to be single-window clearance for all approvals."
The Bill also provides for imprisonment of up to three years in case of promoters and up to one year in case of real estate agents and buyers for any violation of orders of Appellate Tribunals or monetary penalties or both. Naidu said it proposed that a minimum of 70 per cent collections from buyers should be deposited in separate escrow account to cover cost of construction and land.
It will help establish state-level Real Estate Regulatory Authorities (RERAs) to regulate transactions related to both residential and commercial projects and ensure their timely completion and handover, the Minister said.
Appellate Tribunals will now be required to adjudicate cases in 60 days as against the earlier provision of 90 days and Regulatory Authorities to dispose of complaints in 60 days while no time frame was indicated in earlier Bill, he said.
"It brings in only a regulation and not strangulation. This Bill is not against anyone...Real Estate Bill will renew investors' confidence and ensure timely completion of projects and create more opportunities. In this way, it will help in achieving the target of 'Housing For All'," he said.
"Government has done its best to accommodate the views and suggestions of various stakeholders and different political parties in the matter. It is our collective responsibility to protect the consumer, encourage the developer and ensure orderly growth of the sector," Naidu said as he sought support of all sections for passage of the bill in the Upper House.
He said the objective of 'housing for all' can only be achieved if construction sector is supported to grow orderly in an atmosphere of mutual trust and confidence, credibility, efficiency, accountability and transparency and timely execution of projects.
Real Estate sector is the second largest employer in the country, next only to agriculture and accounts for about 9 per cent of GDP and the construction sector supports 250 ancillary industries.
"Such an important sector, over decades has been marked by lack of trust and confidence between the consumers and project developers. In the process, this sector has acquired certain notoriety, adversely impacting investment climate and hurting the interests of lakhs of home buyers every year," he said.
Naidu said about 10 lakh people buy houses every year with an investment of about Rs 3.5 lakh crore. As per available information for 27 major cities including 15 capitals, 2,349 to 4,488 new housing projects were launched every year between 2011 and 2015.
"Thus in these 27 cities during these last five years, a total of 17,526 projects were launched with a total investment value of Rs 13,69,820 crore.
"Delay in implementation of housing projects due to lack of transparency and accountability has been the bane of real estate sector in our country. This results in huge cost and time overruns, resulting in increased cost of houses. This is a matter of serious concern in the context of every citizen aspiring to own a house of his or her own," he said.
But for reasons like lack of regulation in this sector, the consumer has been reduced to a state of helplessness, he said, adding "the consumer shall be the king as had happened in sectors like telecom after a regulatory mechanism was put in place. There is an imperative need for consumer to be the king in real estate sector also.
"When there is a king, there got to be a queen also. The queen obviously is the developer. And there shall be a happy marriage between the king and the queen, for both to live happily ever after. Naidu said a total of 76,044 companies were involved in the real estate sector, which has unfortunately been seen in poor light on account of unscrupulous activities of some developers.
The Bill provides for registration of all real estate projects with Regulatory Authorities to be set up, requiring developers to disclose project information including details of the promoter, project, lay-out plan, land status, status of approvals, agreements along with details of real estate agents, contractors, architects, structural engineers.
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