The pros and cons of the real estate regulation Bill

Q: Now, there are many guidelines to be followed by builders/developers while constructing, launching and promoting new residential projects.

Sashidharan,

16th December 2015

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Replies (4)

Hi Rakesh,
I heard that housing and poverty alleviation ministry has prepared a Model Tenancy Bill, expected to be placed before the cabinet, that is aimed at an authority to register tenancy agreements with a special court to consider disputes. We should not ignore rental issues which a tenant has to face during rent a house. They have to pay huge amount a s a security deposit to the flat owners.

Richa, Delhi

16th December 2015

Comment

Hello Richa,
It is expected that the Model Tenancy Bill will be placed before the cabinet in the winter session. Both these laws, if they come to existence, can encourage foreign direct investment (FDI) into this sector.

Rakesh, Bangalore

16th December 2015

Hi everybody,
perhaps it may be wise for lawmakers to see how approvals wrongly granted before a project takes off create huge long-term problems, for buyers and cities as a whole. It is better to be warn in advance and prepare in advance for danger.

Rakesh, Bangalore

16th December 2015

Comment

Right Rakesh,
There is no doubt the Bill passed for parliamentary consideration is a step in the right direction in an industry where builders are known to take the money from buyers and then making them pay in so many ways such as in time lost due to delays, higher interest payments on home loans, missed quality specifications and other aspects that violate the spirit of purchase agreements.

Sashidharan,

16th December 2015

@Sashidharan,
The Real Estate (Regulation and Development) Bill, 2015 will create state-level regulatory authorities to whom buyers can complain. The authorities will be empowered to punish or prosecute developers.
But the winter session of parliament, which is already in a log jam over political fight, seems to have slight chances of considering it.

Rakesh, Bangalore

16th December 2015

There is common practice by builders of giving false promises to deliver flat keys within 1-2 yrs. after registering in under construction project. Now, they are not able to deliver flats to buyers as per decided time-line. Now, under real estate regulatory bill, strict regulations will be imposed on the builders/developers of the project to ensure that construction is running on schedule and flats are delivered on time to the buyer. In case there is a delay in delivery of flats to buyers, then builder will have to pay a full refund with interest.

Kunal,

16th December 2015

Comment

Earlier, we have seen that developers have promoted building projects with attractive amenities and infrastructure in new projects at under construction stage, but later buyers found that many things discussed on website / promotion brochures / layout plan is missing in actual constructed building. Now, with this bill developers need to share project plans in disclosure which will definitely be delivered with a flat. They can't change at a later stage. In case builder is found guilty, then he will be penalized at 15-20% of project costs or jail up to 3 years.

Brinda.S, Delhi

16th December 2015

Absolutely right Brinda,
It is also seen that Developers are selling flats on the basis of super built area which includes common passage area, stairs and other areas which is 25-30% more than actual flat area. Buyer is not informed about actual area of flat which is known as carpet area. Now, with this bill it will be necessary for builders to declare the actual carpet area of a flat in promotional activities.

Sashidharan,

16th December 2015

It is also seen that buyers are not informed about all approvals in the project and risk of delay in delivery due to issue of important approvals from government. In this case, builders initially start working on project after getting some approvals and start selling flats offering huge discounts with pre-launch offer to attract buyers but such projects get stuck at later stages due to some hurdles in getting complete clearance. The bill clearly state that the developers have to get all necessary approvals before they start selling flats.

Brinda.S, Delhi

16th December 2015

Right Sashidharan,
The good news is that India's cabinet has cleared a much-delayed real estate regulation Bill that is expected to help consumers move towards an accountable, transparent and fair deals in a sector known for delays, shortchanging, overpricing and worse.

Kunal,

16th December 2015

Comment

Hi Kunal,
But on the other hand, it still leaves room open for unexpected problems of the kind we have seen this year in the floods that have ruined Chennai.

Sashidharan,

16th December 2015