The recently passed real estate Bill will give more powers to property buyers and will also address the concerns of builders to some extent
The much awaited real estate bill has finally been passed after much uproar. The Real Estate Regulatory Bill (RERB) – which will become a law soon – is aimed at bringing transparency in this sector. This Bill was in the pipeline for ling and was stuck in the legislative proceedings for long.
This brings in a sense of relief to home buyers and investors in Noida-Greater Noida particularly. This area has more supply for residential units and less takers. Most of the housing units which have been sold in Greater Noida West (Noida Extension) and Greater Noida region have been seen faltering on the possession dates and terms.
In the past, there have been occasions when the home buyers who have invested in homes in this region have carried out processions against the developer. The prominent demands included faltering on possession dates, concerns over construction quality and other concerns related to builder-buyer relationships. There are already legal cases where home buyers are challenging the doing of the concerned builders. However, the absence of any legal clarity this situation was like the Pandora’s Box, with both builders and buyers suffering on many counts.
The Fine Print
The law entails chiefly that:
– It establishes state-level regulatory authorities – Real Estate Regulatory Authorities (RERAs), with whom promoters will have to register all projects above a certain size.
– The developers will make all details like possession dates, construction quality facts public on their websites.
– The developers will have to set aside 70 per cent of the funds collected from customers. This will keep the developers from consuming all funds in one go, preventing a possible cash crunch situation. For now, this law will be punitive in new constructions only. This will set transparent processes in the market.
“Apart from resolving key issues that are hampering the growth of the real estate sector, this bill will lead to institutional reforms in land acquisition, approval processes and taxation that are much needed to expedite development of affordable housing,” said Sunil Kanoria, president of The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
Another industry body is equally buoyant by this Bill’s passage. Anuj Puri, chairman & country head of JLL India, said, “Its enactment as a law will almost single-handedly revamp the way the sector works across the board, from developers to end-users and investors, to lending institutions and government agencies involved in the buying and selling of property. It is by far the most decisive step the sector has taken towards transparency and reaching towards the kind of standardised processes, procedures and accountability guidelines that the industry requires to progress.”
The Big Impact
Once this bill becomes a law, it will prompt buyers to go for purchasing homes without any apprehension of being cheated. This will bring in more credibility to the real estate sector. This will also give a clear legal recourse in case of dispute. In the long term it will uplift the sagging real estate sector to stand up to meet the increase in demand.
What Remains to be Done
This is just the beginning for the real estate sector. There has been a long pending demand from the builders that the government should give the sector industry status and also start a single-window system to seek clearances. Also, there is too much still to be done in terms of institutional investment regulation in real estate.
The buyers also want some tangible actions to be taken so as to understand the application of this Bill.