REAL ESTATE NEWS...Real Estate Bill comes as a breathe of fresh air for aspiring home buyers

The much awaited Real Estate Bill was finally passed by Rajya Sabha this session. This bill is aimed at empowering the home buyers against the trickery and malpractices of builders. The bill has been designed in a manner so as to resuscitate the confidence of buyers and investors. It would also increase the accountability and transparency in the Real Estate business. The following clauses mentioned in the bill are aimed to protect the interest of the common masses that at times have to suffer because of the loosely framed Real Estate laws.

Registration with Real Estate Regulators – The bill highlights that it is mandatory for all the commercial buildings that covers the area of 500 square meters or more or those that include 8 flats or more to be registered with Real Estate Regulators. They also need to provide information regarding layout plan, details of promoter, land status, details of real estate agents, structural engineers, contractors, architects, schedule of implementation and status of approvals. It has also been directed that no project would be sold until it has all the required permission from the local authorities.

Penalty for Builder – Initially the builders took advantage of the lopsided buyer-builder agreements. As per this act the builders too would be liable to pay fine if they delay any payment. They even cannot change any building plan or change the number of floors or the layout of the flat without the approval of two thirds of the buyers.

Escrow Account – More often than not the construction projects get delayed as the builders tend to divert the funds to other projects. But once this law comes into force, they won’t be able to do so because as it has been made mandatory for the builder to allocate 70% of the money deposited by the buyers to the Escrow Account which is meant for solely construction work. This will ensure that the projects do not come to stand still on the pretext of inadequacy of cash.

No Super Area – The concept of Super Area has been abolished by this act. The builders now cannot use the term ‘Super Area’ which indicated carpet area along with the common area. They would have to strictly adhere to carpet area which is the actual area of the flat. Though this the buyer would know exactly how much space would be allocated for his/her flat.
Jail for Misleading Advertisements – The builders have been banned from using misleading ads and can even be jailed for that. The developers would have to rigorously follow the rules laid out by Regulator Act. And if they are found breaching any law they would be fined 10% of the total cost of project.

The Real Estate Bill ensures to regulate transactions for commercial as well as residential building purposes. The complaint filed by the buyers is also proposed to be resolved within 60 days. It is a breath of fresh air for the aspiring home buyers as now their interest would be safeguard since the bill ensures that the project is completed on time.