The Rajya Sabha on Thursday passed the Real Estate (Regulation and Development) Bill, 2015, which is aimed at bringing transparency in the sector and protecting consumer interests.
The Rajya Sabha on Thursday passed the Real Estate (Regulation and Development) Bill, 2015, which is aimed at bringing transparency in the sector and protecting consumer interests.
Describing it as a “great news for aspiring house buyers”, Prime Minister Narendra Modi said the bill “fully ensures more transparency, accountability and efficiency in real estate sector, freeing it from many existing flaws” and will give a strong impetus to our vision of ‘housing for all’.”
The Upper House, which had been witnessing a united Opposition trying to corner the government on several issues, saw a rare bonhomie between the treasury bench and the Opposition. The Congress, which had extended full support to the bill, also congratulated BJP MP Anil Dave, who headed the select committee that looked into the bill, for “taking everyone on board.” Congress’ Kumari Selja said the “whole country is waiting for this bill... Consumers are waiting with baited breath for this.”
Urban development minister M. Venkaiah Naidu described the bill, whic was passed by a voice vote, as the “need of the hour” and also said that it can see further changes in the coming times. He also sought the support of AIADMK members, who had opposed the measure. Mr Naidu also said the bill will renew investors’ confidence and ensure timely completion of projects and create more opportunities.
Asserting that bill would prohibit unaccounted money from being pumped into the sector, the minister said 70 per cent of the money has to be deposited in bank accounts through cheques. To a suggestion by Ms Selja on inclusion of a non-discriminatory clause in the bill, Mr Naidu said, “There will be no discrimination of any kind on basis of religion, region, caste, creed or sex and gender and we will include that in the rules.”
“There has to be single-window clearance for all approvals,” he added.
The bill also provides for imprisonment of up to three years in case of promoters and up to one year in case of real estate agents and buyers for any violation of orders of appellate tribunals or monetary penalties or both.
Mr Naidu said it proposed that a minimum of 70 per cent collections from buyers should be deposited in separate escrow account to cover cost of construction and land. It will help establish state-level Real Estate Regulatory Authorities (RERAs) to regulate transactions related to both residential and commercial projects and ensure their timely completion and hand over, the minister said.
The appellate tribunals will now be required to adjudicate cases in 60 days as against the earlier provision of 90 days and regulatory authorities to dispose of complaints in 60 days while no time frame was indicated in earlier Bill, he said.
Mr Naidu said a total of 76,044 companies were involved in the real estate sector, which has unfortunately been seen in poor light on account of unscrupulous activities of some developers.
The bill provides for registration of all real estate projects with Regulatory Authorities to be set up, requiring developers to disclose project information including details of the promoter, project, lay-out plan, land status, status of approvals, agreements along with details of real estate agents, contractors, architects, structural engineers.
Participating in the discussion on the bill, Ms Selja said consumers were falling prey to unfair practices as there was no regulatory mechanism and also suggested that all housing projects should be brought under the purview of the bill.
Mr Anil Dave said “A regulation is coming in a field in which this country’s money is being pumped in. With the beginning made today, things will become transparent. Through this bill, there will be no difference between what the developer shows and what he sells. It will have to be the same and all details of the project will be uploaded.”
SP’s Naresh Agrawal wondered if the state laws will be superceded by this bill and whether states will adhere to this central law or not. He had earlier objected to introduction of the bill through a point of order saying land was a state subject and the bill would take away powers of states.
Deputy Chairman P J Kurien, however, rejected his point of order saying “at this stage, your point of order has no relevance and I am ruling it out.”
Insisting that the government does not want to harass the builders, Mr Naidu referred to the provisions in the bill that attracts jail term for builders who cheat the consumers.
“Cheating is a crime. It is not that jail is the first option. There is first warning and then penalty. Only after that is the jail term for repeat offenders,” the minister said, adding that false advertisement by builders will attract penalty.
AIADMK opposed the bill, with its member A W Rabi Bernard saying land was a state subject. The Centre should have brought a model bill and left it to states to frame their own law, he said, adding that government agencies should have been kept out of purview of the bill. Mr Bernard also warned that the bill will result in making houses and flats costlier.
In its reaction on the Bill, international consultancy agency Deloitte Haskins and Sells said the “transparency provisions of the Bill and punitive provisions will help the end customers to understand complete facts of the project prior to their investment decision.” It also maintained that it is also “beneficial for the genuine developers who will enjoy a better goodwill with the end customers and can earn a better premium for their products.”
