Real Estate Bill & NRIs

In what can be termed as a welcome news for millions of real estate buyers across India including non-resident Indians, the Union Cabinet has approved the amendments in the Real Estate (Regulation and Development) Bill, 2013 paving way for the industry watchdog to overlook all construction related activity in the country.

With the approval, the bill is likely to be tabled in the ongoing parliament session for active discussion and approval before it is signed by the President to become a law.

The Overview of the Real Estate Bill:

The Real Estate (Regulation & Development) bill is significant as it aims to act as protective cover for consumers and establish regulatory bodies at the centre and states responsible for ethical and transparent business practices in the real estate sector. The move is seen as a fundamental plan to ensure greater accountability towards consumers in the notorious real estate sector.

As per the approved bill, any real estate agent planning to sell any plot of land, apartment or any residential or commercial building will have to register with the Real Estate Regulatory Authority. The builder or the real estate agent would also have to furnish complete details of promoters, layout plan, the status of land and various approvals along with its earmarked schedules for execution to the Real Estate Regulatory Authority making the plans completely transparent. Any delays on the submitted proposals can lead to fines including a jail term for deliberately delayed projects.

Real Estate Bill and NRIs:

With the approval of the Real Estate (Regulation & Development) bill the buyer including the NRI buyer will witness a strengthening of his or her buyer rights. Earlier the MoU between the builder and buyers were largely stacked in the favor of builders which had a dedicated legal team drafting the agreements to avoid any legal obligation. While some builders included a delay clause, most builders offered no such clause for the buyers.

The NRI buyer had no way to approach any ombudsman or regulatory body online to complain against the builder and the only option was to file a legal complaint in the Indian court.

Now with the Real Estate (Regulation & Development) watchdog coming into place, the NRI buyer can check the details of the project online as well as file for any complaints to the Real Estate Regulatory Authority without having to travel to India. The bill regulates the builders to keep 50% of buyer’s investment into an escrow account that need to be used exclusively for the construction of that project. This means the builder cannot give a financial excuse for delaying the project lowering the chances of a project delay.

Another safeguard essential for both domestic and NRI buyer is the fact that builders cannot alter plans or structural designs of the project without the consent of two-thirds of the buyers. A number of NRIs had been disgusted in the past as the final result was way different from the proposed plan of the building they saw while booking the property. Unlike in the past where they had no place to complain against such a development, the Real Estate Regulatory Authority will be easily approachable for the common man making it convenient to invest in any real estate property in India.