The much awaited Real Estate (Regulation and Development) Bill 2016 has been cleared by the RajyaSabha, thanks mainly to the Congress which did not allow this important Bill to face the fate of other Bills like GST Bill pending before it . This piece of legislation was first introduced by the erstwhile UPA government in 2013 and already passed in the LokSabha then.
The RE Bill aims to bring in total transparency, lack of which was haunting the present system and induce an inbuilt system of discipline and accountability making all the stake holders – the builders, the buyers and the brokers responsible.
In a way the pulse of the bill is indicative of the fact that there is a need to protect the home buyers, more often said to be the most axed segment in the arena of real estate business.
The Bill also seeks to plug the inflow of unaccounted money in to the system by introducing various provisions. What is a highly promising provision of this Bill is that the builder/developer is required to keep 70 per cent of the proceeds from the sale of flats in a separate account and this segment of the money will have to be used only for the same project and to meet the cost of the same land. This will definitely pave the way for the proper utilization of the money paid by the buyers and it will lead to completion of the project almost within the stipulated period of time. This is a unique provision that restricts the builders to utilise the money collected from one project to invest it elsewhere leading to mismanagement of the fund and consequent delay in completing the project. If there is any delay in completion of the project the builder is liable to pay interest and at the same time if the buyers do not adhere to the payment schedule, they too are liable to cough up interest at the same rate.
Further the Bill seeks to create appellate tribunals and registries to decide and resolve disputes between the buyers and sellers within 60 days. If there is any violation of the orders of the regulating agencies, then it can attract fine as well as imprisonment.
Apart from these epoch making provisions, the Bill also provides for a more practical approach for norms for registration of the project. It is now possible to register a project having 500 M2 area or eight apartments.
With all said, the Bill cannot be considered as cure for all the ills found in the real estate scene, mainly in the fast developing metropolitan cities like Navi Mumbai and Mumbai. A plethora of problems, mainly litigations and disputes involving non completion of the projects have been a regular issue in the real estate sector in such cities, where the sagging real estate sector needs a booster.
Success of this Bill, like any other measure will depend upon how effectively this Bill isfollowed in letter and spirit.
The all out sincere approach on the part of the State Governments will be the edifice of this bill as Real Estate comes under the State list, where the promulgation of the laws are the prerogative of the State Governments. States like Maharashtra, which has a government controlled by the same political outfit as at the Centre can ride on it easily. It would be somewhat a tricky proposition in states like Tamil Nadu or Kerala, which have expressed some reservation about the Bill in the past.
Any way lets us take this Bill in its good intention and hopefully surmise that would achieve the desired result.