Review of Real Estate Bill, 2013

Q: Hi, got the news that the real estate bill has been approved by the cabinet. What will be its impact? Will it bring transparency and regularity to our Real Estate Industry?

Sanjay Gupta, Delhi-NCR

7th June 2013

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Replies (18)

After the bill is passed how much we have to pay at the time booking and if the project gets delay will the home buyers get any compensation?

Lekshmi,

31st August 2013

Comment

Without signing a written agreement, a developer will not be entitled to take more than 10 percent money as advance from a buyer. This is likely to control transactions based on black money to some extent but however the buyers should encourage giving money to developers on trust basis.The regulatory bill restricts the builders to complete the project construction as scheduled prior, and deliver the flats on time. If the possession date is delayed, then the developer will have to refund the entire money to the buyers along with interest.

Amreesh Murugan,

31st August 2013

Once the possession of the flat is handed over to a buyer and after which the buyer may rectify any structural defect or deficiency in the development of building, then it is the developer’s responsibility to correct them, without any additional charges. The bill states that the buyer ha to inform the developer about such defects within one year from the date of purchase

Samrat,

31st August 2013

Once the bill is executed, the developers have to sell the flats based on the carpet area of the units and not on built up area or super built up area basis. Many buyers are unaware of the actual carpet area of the units they buy and often end up paying more money. But the bill makes it mandatory for the developers to declare the actual carpet area of units in promotion activities too. Moreover it is compulsory for the developers to maintain escrow bank accounts for every project and maintain all project related transactions. They should keep aside 70 percent of the fund collected for the project in the account. The fund so saved should be dedicated only for that particular project and it cannot be used for any other project.

Amreesh Murugan,

31st August 2013

Comment

What are the pros and cons of the Bill which will give some clarity on what it actually holds for the buyers?

Govinda,

31st August 2013

Comment

The bill ensures that what is promised by the developers is what that is offered to the buyers. The developers and promoters will have to disclose the actual plans and the list of facilities and amenities that will be delivered with the project. There should not be any change at a later stage of project development as per the developer’s will and wish. The bill restricts the developers to only use the actual pictures of the site and construction status for advertising the project. The developers should only use the right information, layout and plan related to the project on their websites, brochures and any other marketing activities and deviating from this is a punishable offence. If a developer is found guilty, then he will be penalized at 10 per cent of project costs or jail up to three years.

Aveek Paul,

31st August 2013

The bill states that the developers can launch their projects only after getting all requisite clearances from the concerned authorities for the projects. The status of the approvals should also be displayed on the developers’ websites. Buyers will not have to anxiously wait for long as to when the developer gets all the approvals and when the project gets completed. With this rule, it is expected that the concept of pre-launch offers would no longer exist as the launch and promotion can only be done after seeking approvals which involves long time. And by the time of launch, it is likely that the cost of project would be very high. On the flip side, there is no rule stated for what has to be one to speed up the approval project by the government authorities. They have to follow a certain time frame in order to ensure smooth approval process.

Samrat,

31st August 2013

The new Real Estate Regulatory Bill which was approved by the union cabinet in June 2013, has been recently tabled in the Rajya Sabha, which once passed, may curb most of the irregularities in the real estate industry.

Kaushik Bardia,

30th August 2013

Comment

The Bill holds many guidelines to be followed by the developers while launching, promoting and developing new residential projects, and this gives more power in buyer’s hand.

Suresh,

30th August 2013

Guys.. it is being said by experts that this bill is going to increase corruption and black money usage in the sector. I wish the bill bring in transparency but not any more complexities. I am not able to understand whether as a buyer we should be happy or worry about price hike and corruption?? Are there any amendments suggested to the Bill by any state or developers...

Sunil Sharma, Noida

27th June 2013

Comment

Hi Devesh, since there will be only one authority for giving approvals, it is expected that it might increase corruption. However we cant say that it will definitely do that. And regarding price hike, I too believe it will increase. The bill has so many restrictions for developers, so the developers will look for ways to make profit. One important way for them is to increase cost of properties.

Hemant, Noida

20th June 2013

Comment

We all have been hearing that the real estate bill will also have some negative effects. It will rise the prices and increase corruption in the industry. Is it so? Does it really have any ind of loopholes or does it lack certain things? And will the bill encourage corruption among the officials and black money usage in the sector? Share your views friends.

Devesh Kumar, Ahmedabad

20th June 2013

Comment

22 states have given green signal to the Bill but 5 states were asking for some amendments. These changes have been incorporated in the Bill that is cleared by the Cabinet. Chhattisgarh state is still opposing the Bill it seems. Also so many developers are against the bill. Only renowned biggies are okay with the bill. Some of the developers have written letters to the ministry requesting for some changes in the bill and we have to wait and see what will happen finally.

Nitesh Patil, Pune

20th June 2013

Comment

Still the bill fails to provide solutions to several important issues related to government. Maharashtra govt uses built-up area for referring area under sale but the new bill states to consider carpet area. Whether the govt should use it or not is not made clear.

Sushant, Mumbai

18th June 2013

Comment

Hi all.. very nice discussion happening over here.. i too hope that the bill will really bring in transparency in the sector... it will remove fraud system and cheaters along with the roots frm the system. But once the final approval is given by govt, the bill should remain unchanged, or if the politicians or influenced people make changes as per their need then the bill may not have such deep impact on the sector. There should have been more provisions in which punishment to builders or brokers is mentioned. Also there should have been few more inclusiosn here, hope to see it in the next amendment of the bill.. .

Dhiraj,

18th June 2013

Comment

I am very happy to know about this bill. Im waiting when it will be implemented.. I actually had planned to book an apartment in this month.. but after this bill was announced i have postponed my plan because i have heard the bill is great for buyers. Once the bill comes into effect, i will go ahead with my plan. Isn't it a good idea? Looking forward for he bill nad ur suggestions.

Amit Raj, Delhi-NCR

16th June 2013

Comment

Good point Sunil.. There is a clause in the bill that is related to this issue .. If there is any major defect or lack in the project developed, and if a buyer brings it to the notice of the promoter within a year from the date of handing over possession, then it is the duty of promoter to rectify the defect without any extra charge.

Ramneek, Bhiwadi

16th June 2013

Comment

All these are only before a project starts.. But what if construction of the project is poor. In case if a person who has bought apartment starts living then he realise that the quality is bad, then what to do.. there are so many complaints of this kind.

Sunil Sharma, Noida

16th June 2013

Comment

Yes guys, the bill is really harsh on developers.. They cant even promote the projects unless the project gets all approvals. Selling any units of project without getting all approvals is also not allowed. This is actually a good initiative. But at least marketing could have been allowed I think. Booking should not be allowed definitely because after booking if buyers get to know that project is not reliable then that will lead to lot of mess.

Puneet Laskar,

16th June 2013

Comment

The bill if finalised will also stop fraud brokers.. Now we can see hundreds of brokers in every locality of top cities.. in every street you can see property agents offices.. The Bill makes it mandatory for agents to register with regulator. So the money-making business will be stopped i hope. Buyers can relax.. but we should wait and watch whether the bill will be finally okayed or not.. And im afraid many of the rules in the bill would be altered by the time it gets running..

Anoop, Mumbai

13th June 2013

Comment

Hi guys.. developers seem to be very upset with the real estate bill.. they will have to put an end to their money-making tricks, which is bothering them. It is clear that from buyers perspective the bill is really good and useful. Only properly approved and registered properties will be sold. We can save our hard earned money from going into buyers' pockets.

Ranjith, Bangalore

13th June 2013

Comment

Well I will be more than happy if the bill does some good and brings transparency to this whole system to selling and buying. However, I would like tell you guys that the new bill is just the change of nomenclature. As many of the laws stated in the bill already exists but no one follows them. I think government should work on the implementation part as we have many laws in our country but no proper implementation of the laws increases corruption and dependency.

Tarun Shah, Ahmedabad

7th June 2013

Comment

I believe so as the most important problem buyers are facing now a days is buying property on the super buildup areas. They do not have the surety about how much carper areas are they going to have. Where the approved bill says that the builders are bound to sell the apartments or property only on the carpet area.
Moreover, if the builder has made any false promise, in that case if the buyer demands the builder is liable to return the money along with the interest to the buyer.
I believe this will solve a lot of problems and will bring a lot of transparency.

Sudip Ganguly, Kolkata

7th June 2013

Comment