Real estate bill - How home buyers will benefit?

The Union Cabinet recently approved amendments to the Real Estate Bill, which was first proposed in 2013. The Bill will now be taken up for consideration by the Parliament. The provisions of the Bill are aimed at protecting buyers and bringing in transparency in the sector. The provisions of the Bill will be applicable on both the existing projects as well as projects in which sales are in progress.

• The provisions of the Bill will be applicable on both the existing projects as well as projects in which sales are in progress
• It requires real estate developers to deposit 70 per cent of the project cost in a separate account for timely completion of the project
• A provision for insurance of the land title has to be made for avoiding loss for both buyers and developers in case of dispute in land title
• Buyers will have to take the possession of the house in two months after they receive the occupancy certificate to avoid delay in registration. A delay in registration hurts revenues of the state in the form of stamp duties and other charges
• Developers can’t sell property on the basis of super area (flat area plus common area). They will have to clearly define the carpet area that includes space like kitchen and toilets. The parking will have to be sold separately
• Formation of allottees associations have been mademandatory within three months of allotment of majority of units in a project so that buyers get to manage facilities like common hall, clubhouse, and reading room.
• A real estate regulatory authority has to be set up in states/union territories to regulate property transactions. It is applicable both for commercial and residential real estate projects. Projects of 500 square metres area or 8 flats will have to be registered with the regulatory authority. The regulatory authority will be allowed to grade projects along with the promoters to enable consumers to make a more informed decision.