Can the Real Estate Bill Safeguard Buyers' Interest?

Bangalore: The government is likely to come up with a Real estate (Regulation and Development) Bill in the forthcoming Budget session of the Parliament to regulate the real estate sector.

This proposed bill is expected to control unethical and deceitful practices in the real estate sector, according to property experts. “While the penal interest provision could hurt realty players; the Bill if it goes through would indeed in the interest of several buyers - especially the middle class, for whom purchasing a property has been a herculean task (due to skyrocketing prices) and unscrupulous practice adopted by some developers,'' said Ramesh Prabhu, a consumer activist, reports Rajshri Mehta of TNN.

Below stated are the following proposed in the regulation bill to safeguard buyers’ interest.

Real estate developers have to reveal project details and any kind of contractual obligations with the home buyers to maintain transparency and fair business. 

As per the regulation bill, private real estate developers have to register their projects before selling it to end-users.  To register a property, developers have to get all requisite clearances which in turn reduce fraudulent business in real estate sector.

Moreover, if developers fail to affirm the project clearance status to home buyers then the bill imposes fine on levy charges of up to 10 percent of the total project cost or three years of imprisonment.

As per the bill, real estate developers have to keep 70 percent of funds in a particular bank to avoid cash crunch situation which leads to project delays.

The bill also states that when selling residential property to home buyers, developers have to sell the property based on “carpet area” and not on the basis of “super area”, which is practiced currently. This step is to give home buyers a little relaxation on property buying and also to bring transparency in the realty sector.