The updated bill now mandates projects on 500 sq metres of area or with eight flats to also be registered with the regulatory authority instead of 1,000 sq metres proposed earlier, bringing in a larger number of projects under the regulator's ambit.
Builders will now have to deposit at least 70% of the sale proceeds, including land cost, in a separate escrow account to meet construction cost. Earlier proposal was 50% or less of sale proceeds.
Among the changes, builders will now have to pay equal rate of interest in case of default or delays as home buyers. What has also been changed is the liability of builders for structural defects that has been increased from the earlier two to five years now.
Carpet area has now been clearly defined to include usable spaces like kitchen and toilets to make it clear. Garage is now to be kept out of the purview of definition of apartment and is separately defined. Formation of allottees associations is now mandatory within three months of allotment of majority of units in a project so that buyers get to manage facilities in the housing project.
The bill now allows aggrieved buyers to approach 644 consumer courts which are available at the district level instead of only the real estate regulatory authorities proposed to be set up under the bill, mostly in capital cities, for redressal of grievances.
The government had earlier added a few changes to the bill in December 2014. It had brought commercial real estate projects under the ambit of the bill; had made the provisions of the bill applicable to all existing projects wherein sales are still in progress, and put in place a system that would require consent of two thirds of the buyers in a project for changing project plans.
Getamber Anand, national president of industry body Confederation of Real Estate Developers' Associations of India (CREDAI) says that while builders welcome the changes, the bill should not be retrospective in nature as it will lead to a lot of confusion and delays. He pointed out that commercial real estate should be kept out of the ambit of the regulator.
"Also, they still have not included sanctioning authorities in the bill. So where do we go if there is a delay in getting approvals such as plinth certificates, occupancy certificate, electricity and water connections, even after the project has taken off. Without these permissions, even a completed project cannot be offered for possession to home buyers," says Anand.
These issues, he says, should be addressed so that they do not become a pain point for the industry.
Anuj Puri, chairman and country head at property consultancy JLL India says it will get more transparency and accountability into the sector and transparency in turn will help bringing the cost of capital down, which will be good for both developers as well as buyers.
"However, it needs to be ensured that it does not become one more approval authority as we already have several of them. To begin with, we could have started with large projects and then brought smaller ones under its ambit, as it will be too much of volume to handle at a time when we are starting with it," he says.
The revised bill now includes an enabling provision for arranging insurance of land title, which is currently not available in the market. This will benefit buyers and sellers both in situations where the title of the land is held invalid.
The regulatory authorities would promote single window system of clearances for real estate projects that is likely to speed up construction work that now lags because of delays in getting permissions.
Regulatory Authorities can now grade projects along with grading of promoters besides ensuring much desired digitization of land records. They will now be required to make regulations within three months of its formation as against six months proposed earlier. States will now have to make rules within six months of notification of the proposed Act as against one year earlier proposed; Allottees shall take possession of houses in two months of issuance of occupancy certificate.
The bill now states that additional benches of Appellate Tribunals can be set up in a state if required for speedy adjudication of grievances.
A new provision has been created for imprisonment up to three years in case of promoters and up to one year in case of real estate agents and buyers for violation of orders of Appellate Tribunals or monetary penalties or both.
Also, appellate tribunals will now have to adjudicate cases in 60 days as against 90 days proposed earlier and Regulatory Authorities to dispose off complaints in 60 days while no such time limit was indicated earlier
No comments:
Post a Comment