Home Buyers

Real Estate Regulatory Bill brings the much-needed Protection for home buyers

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Real Estate Regulatory Bill brings the much-needed Protection for home buyers



The long-pending Real Estate Regulatory Bill was amended and approved by the cabinet. The Bill offers much-needed protection for home buyers and would help increase disclosures in the real estate market.
For instance, the Bill makes it mandatory for all under-construction projects to be registered. The developer has to disclose project details including layout plan, approvals, names of promoters and contractors during registration. Giving all these detailed information will help improve transparency.
The Bill also limits the changes a developer can make to the original plan. Any changes require getting the consent of 2/3rd's of the customers. This is a great plus, as in the past home-buyers were usually left in the dark about size, floor plan and design changes. Now, they have to be informed about the changes and have the right to withhold consent if they are unhappy.
The developers must also maintain half of the amount collected for a project in an escrow account. While the share to be held was reduced from 70 per cent in the original proposal to a lower share now, the chances of developer diverting funds collected from one project to buy land or cover costs of other developments will be minimized now. Maintaining funds for each project individually will also help increase developer accountability.
Besides the developers, the Bill also covers brokers and agents who sell property. They are also required to register with the real estate regulatory authority - a new agency to be set up by the States to oversee compliance. Buyers can take up their issues to the authority along with using existing options such as consumer courts. The welcome aspect for many home buyers who are facing long delays in the legal system is that dispute resolution by the regulatory authority is expected to be fast tracked. The regulator will also have rights to punish the offenders.
One notable change in the revised Bill is that it covers commercial projects in addition to residential segment. However, what is still not addressed are the issues faced due to approval delays from government departments – a reason commonly cited by developers for not meeting their commitments to customers.


- by Meera Siva

Source :- The Hindu Business Line

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