In a big relief for home buyers, the Real Estate (Regulation and Development) Bill 2016 that seeks to create a regulator for the housing sector, has moved a step closer to becoming a law with the Rajya Sabha clearing it on Thursday.
The bill, which was pending in the Rajya Sabha for three years, makes it mandatory for builders to deposit 70% of money collected from home buyers in a separate account towards cost of construction so that the amount cannot be siphoned off for other projects.
The legislation would define the carpet area that normally forms the basis for purchase of houses, eliminating any scope for malpractices in transactions. The liability period of developers for structural defects has been increased from 2 to 5 years and they have been barred from changing plans without the consent of two-thirds of allottees.
The government fast-tracked the bill by accepting amendments proposed by the Congress. Last week, Congress vice-president Rahul Gandhi met a delegation of home buyers and assured them the party’s committment for a strong law to protect their interest.
Piloting the bill in the Upper House, Urban Development Minister M Venkaiah Naidu said 76,044 companies were involved in real estate sector. Between 2011 and 2015, as many as 17,526 projects with investment value of Rs 13.7 lakh crore were launched in 27 cities, including 15 state capitals. According to industry information, about 10 lakh buyers invest every year to own a house.
The minimum norms for registration of projects with the regulatory authority would be a plot area of 500 sq mt or eight apartments. As commercial real estate has also been brought under the ambit of the bill, ongoing projects under construction are also required to be registered with the regulatory authority.
