Revised real estate bill to bring relief for buyers, ensures faster action against defaulters

Real estate markets in India have seen a dramatic rise in the past one decade, however, for the buyers, the days were not all golden. Delays in completion of projects and in cheating builders are some of the issues that home buyers faced while buying their dream homes.

However, property market experts think expect the revised real estate regulatory bill to help change the current sentiments among buyers, and would work for boosting confidence among them.

On Wednesday, the Union cabinet approved 20 major amendments to the Real Estate (Regulation and Development) Bill, 2015, aiming to make it more accountable, efficient and transparent, while protecting investors’ rights.

All these amendments are based on the recommendations of the select committee of Rajya Sabha, which examined the pending bill.

The revised bill would act as a plus point for the consumer. The new bill seeks to make even small developers accountable to customers, unlike earlier. Accordingly, even residential projects measuring 500 sq metre or with eight apartments have to be registered with the regulatory authority; earlier, this limit was up to 1,000 sq metres.

However, the most crucial change here is the shorter adherence timelines. Regulatory authorities will now be required to make regulations within three months of its formation as against six months earlier proposed, while the states will now have to make rules within six months of notification of the proposed Act as against one year earlier proposed.

Also, from the buyer’s end, allottees will have to take possession of houses in two months after they are issued occupancy certificates.

Appellate tribunals and regulatory authorities would be required to adjudicate cases in 60 days now, as against 90 days which was the idea proposed earlier.

"These shorter timelines would ensure speedy and stricter completion of projects," Samantak Das, chief economist & national director - research, Knight Frank India, told ET. "Also the option to approach 644 consumer courts at the district level, along with the real estate regulatory authorities proposed to be set up under the bill, would bring the confidence of the buyers back in the market and increase sales," he added.

As per the reforms, there is an option now to set up adjudicating officers and Appellate Tribunal for fast-track dispute resolution, thus resolving one of the biggest challenges for home buyers, which was going for legal recourse.

Also, builders will now have to pay the same rate of interest that home buyers pay in case of default or delays. The liability of builders for structural defects has also been increased from two to five years.

Real estate developers would also have to deposit 70% of the project cost in a separate escrow account, which was proposed to be 50%. Also, promoters of the project would be barred from changing plans and designs without consumer consent.

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