<div>Attempts to bring some regulation into the real estate sector reached an important stage recently with the select committee of the Rajya Sabha approving some amendments to the Real Estate (Regulation and Development) bill. The bill has a long history, as it was first framed by the UPA government, then amended by the NDA government and then again saw changes proposed by the parliamentary committee. The real estate sector badly needs reforms and regulation as it has been marked by malpractices, corruption and illegalities. Almost all home-buyers have faced problems and they have been unable to solve them in the absence of a legislative framework to govern the actions of real estate developers. The bill sought to establish regulatory authorities at state level, to prescribe the best practices and to impose penalties on violators. This provided a basic set of rules and regulations where none existed.<br /><br />The committee has unfortunately diluted some provisions in the bill which had been considered to be fair and balanced. It will now cover only projects of 500 sq m with eight apartments or above, thus leaving out a large number of ordinary home buyers. While the bill had proposed that the builder should deposit 70 per cent of the funds collected from buyers into a separate account, this has now been changed to 50 per cent. Diversion of money for other projects has been a major cause of delays and even failure of many projects. Developers have also been allowed to make alterations in project plans, while this was very difficult under the earlier provisions without the consent of the home buyers. The case for making these changes is weak because extensive consultations had already taken place on the provisions of the bill and the Union cabinet had approved it.<br /><br />However, the bill is welcome even in its diluted version because it empowers the harassed and harried customers to legally enforce their rights. To have a law is better than to have no law at all. The existing rules hardly helped home-buyers because in the case of malpractices and other problems redressal of grievances was near impossible. The average home buyer cannot fight the resourceful and well connected builders and developers. The amended bill was expected to be passed by parliament but it did not happen because the monsoon session was a washout. It should be among the priority legislations to be passed by parliament at the earliest opportunity. It is also still possible to ignore the committee’s recommendations and pass the bill in its original form.</div>
<div>Attempts to bring some regulation into the real estate sector reached an important stage recently with the select committee of the Rajya Sabha approving some amendments to the Real Estate (Regulation and Development) bill. The bill has a long history, as it was first framed by the UPA government, then amended by the NDA government and then again saw changes proposed by the parliamentary committee. The real estate sector badly needs reforms and regulation as it has been marked by malpractices, corruption and illegalities. Almost all home-buyers have faced problems and they have been unable to solve them in the absence of a legislative framework to govern the actions of real estate developers. The bill sought to establish regulatory authorities at state level, to prescribe the best practices and to impose penalties on violators. This provided a basic set of rules and regulations where none existed.<br /><br />The committee has unfortunately diluted some provisions in the bill which had been considered to be fair and balanced. It will now cover only projects of 500 sq m with eight apartments or above, thus leaving out a large number of ordinary home buyers. While the bill had proposed that the builder should deposit 70 per cent of the funds collected from buyers into a separate account, this has now been changed to 50 per cent. Diversion of money for other projects has been a major cause of delays and even failure of many projects. Developers have also been allowed to make alterations in project plans, while this was very difficult under the earlier provisions without the consent of the home buyers. The case for making these changes is weak because extensive consultations had already taken place on the provisions of the bill and the Union cabinet had approved it.<br /><br />However, the bill is welcome even in its diluted version because it empowers the harassed and harried customers to legally enforce their rights. To have a law is better than to have no law at all. The existing rules hardly helped home-buyers because in the case of malpractices and other problems redressal of grievances was near impossible. The average home buyer cannot fight the resourceful and well connected builders and developers. The amended bill was expected to be passed by parliament but it did not happen because the monsoon session was a washout. It should be among the priority legislations to be passed by parliament at the earliest opportunity. It is also still possible to ignore the committee’s recommendations and pass the bill in its original form.</div>
