Aam Aadmi becomes powerful with the Real Estate Bill

“I have bought a flat {project’s name} because I liked the spacious design and privacy of the flats. But after moving in, I realised that the quality of material is very poor and quality of finishing is sub standard, ” – rues Sumitabh Ghosh, a resident of Bangalore at CommonFloor’s Consumer ‘Forum’. 

Bharath, another resident of Bangalore spent his hard-earned money in a project that was sold to him at Rs 1,100 per sq.ft. as a pre-launch offer. “Later, the promoters stated that the site is under litigation and does not have khata and tax paid details.” The marketing manager who sold him the property is now absconding.

Due to such clandestine practices resorted to by few developers, the buyer who puts his hard-earned money, have to bear the brunt. Among several others, hiding important details regarding the property tops the ladder. But not anymore! In a landmark move by the Union Cabinet, the long-pending dream of the sector has finally come true!

Mandatory Public Disclosure of Project

With the clause of mandatory public disclosure, a developer will now have to put all the important details pertaining to the project in the public domain. These include, land status, status of statutory approvals and disclosure of proforma agreements, layout plan and plan of development works. In addition, details such as names and addresses of real estate agents, contractors, architect, structural engineer will also be easily available. Thus, the chances of fraud are likely to reduce.

Duties of Developers

Further, the bill clearly states the duties of a developer. Thus, now a developer will have to adhere to the approved plans and project specifications. The duties also states certain obligations regarding honesty of the advertisement for sale or prospectus. In case there is a structural defect, developer should rectify it and lastly, should refund the money in case of default.

Establishment of Real Estate Regulatory Authority in State

Moreover, establishment of one or more ‘Real Estate Regulatory Authority’ in each State/Union Territory (UT) would also ensure transparency. Also, in case of any fraud, this will be the go-to place. This, Vineet Relia, Managing Director – SARE Homes thinks, will boost transparency and accountability in buying or investing transactions in housing projects and enhance the sector’s credibility, in turn enabling the sector to access capital from the financial markets for its long-term growth. This will also resort the general public’s confidence in the real estate sector.

Further adding to this, Prashant Solomon, MD, Chintels India and Member, Governing Council, CREDAI NCR puts across a very interesting point. He says, ”while the establishment of a real estate regulator is a positive step in increasing transparency and credibility of builders while protecting the consumers, it will only be valuable if and only if government authorities are also legally bound to grant approvals within a specified time period.”

The Bill still has to take a fairly long journey to become an Act. All said and done, the Real Estate Bill, only if implemented strictly will pave the way for growth of the realty sector.

Read More:

Real Estate Bill: What it means for Buyers? Part I

Part II: Major Loopholes in the Real Estate Bill to watch out for