Credai seeks amendments to Real Estate Regulatory Bill

Credai seeks amendments to Real Estate Regulatory Bill
Highlights

Hyderabad: Confederation of Real Estate Developers' Associations of India (Credai), while welcoming the Real...

Hyderabad: Confederation of Real Estate Developers' Associations of India (Credai), while welcoming the Real Estate Regulatory Bill cleared by the Union Cabinet on Tuesday, has sought amendments to certain provisions which are likely to adversely impact affordable housing initiatives. "Certain provisions in the Bill are required to be amended / removed otherwise they will result in substantial increase in the cost to the home buyers and, in long run, will shatter government's dream to promote affordable initiatives," C Shekar Reddy, national president, Credai, said in a statement.
Credasi
Pointing out that Credai had certain strong reservations on some of the clauses of the Bill, he said: "We will keep on working with the ministry and the states, so that our members are not unnecessarily victimized and License Raj does not come back". Reddy underscored the need for maintaining equilibrium between the developer's community and the end user. "The provisions like revocation of registration will certainly put the projects in limbo for months and years due to litigation which will act against the interests of the consumer," he pointed out. Stating that regulation was required for any developing market, he said: "To make the regulation effective, the Bill should regulate the entire real estate industry covering all the stake holders like the competent authority, local authorities, financial institutions, electricity board, water board, fire department, etc.," he added.
Some like it, others say penalties too harsh
New Delhi (IANS): The government's decision to approve the Real Estate (Regulation and Development) Bill has evoked mixed response from the industry. While some realtors applauded the new legislation saying it would bring in more transparency into the sector, others criticised it for being too harsh in prescribing stiff penalties that can be imposed on developers. "It is a welcome step. We had been waiting for the same since long as it would bring buyers' ease along with transparency and respect to the sector," said Navin M Raheja, president, National Real Estate Development Council (NAREDCO). "The bill will help streamline the clearances process for all developments." The Confederation of Indian Industry (CII) also welcomed the bill which was pending since 2007. It hoped that the new legislation will bring in enhanced protection to consumers and not just replicate existing laws. "We must keep in mind that multiple acts exist for protection of consumer interests hence, it needs to be ensured that the proposed real estate regulatory authority (RERA) does not end up merely replicating various functional roles," said Firdose Vandrevala, chairman, CII national committee on real estate and housing. The union cabinet on Tuesday cleared the bill to set up a regulator for the sector with provisions for jail term for the developer for putting out misleading advertisements about projects. According to the bill, developers would have to register their projects which measure 4,000 sq mts or more with the regulator. And they can launch projects only after acquiring the statutory clearances. Provisions in the bill mandate property agents to get themselves registered with the regulator. The bill also makes it mandatory for developers to provide some portion of project townships for the lower income groups. The bill also has provisions to curb misleading advertisements related to projects by providing a clear definition of carpet area. The bill envisages establishment of fast track dispute resolution mechanisms.
Realty Speak
  • It regulates real estate business on the lines of other regulators like Trai.
  • It applies only to residential projects and not to commercial estates.
  • It imposes tough penalty for the misleading/deceptive advertisements soliciting buyers. First time offenders have to pay penality of 10%, repeated the same act is punishable three years impresionment.
  • Builder has to obtain all necessary clearances before selling apartments, i.e, cannot collect fund from buyers for pre-launch projects.
  • Builders allowed to take more than 10 per cent advance only with written agreement.
  • In the event of delay, the buyer is entitled for full refund.
  • Builder has to deposit 70% of the proceeds in a bank to prevent diversion of the funds.
  • It is mandatory to define 'carpet area' as aginst 'super area', is now being revealed amounting to 25 to 40 per cent more than actual usable area.
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