Is the Modi govt's Real Estate Bill pro builders and anti buyers?

Is the Modi govt's Real Estate Bill pro builders and anti buyers?

Introduction:

While most people are in support of the Modi Government's Real Estate Regulatory Authority Bill, Rahul Gandhi and few others have taken the turn to oppose the bill, accusing it to be pro builders and anti buyers. The Bill was listed for discussion on Tuesday but the government did not press for it in the face of opposition to it both inside and outside the House. Back from the vacation or exile as we thought, Congress vice-president Rahul Gandhi met home buyers and discussed their opinion on the Bill. The Opposition submitted a notice for referring the Bill to a Select Committee and are of the view that the draft legislation favours builders at the cost of home buyers.

The main points of the Bill:

1. The major change in the bill is the extension of the applicability of the Bill to commercial real estate also. There are many ongoing projects that have not received Completion Certificates and are facing delay. Now these projects be considered under the purview of the Bill and will have to be registered with the Regulator within 3 months according to the union government. Builders cannot advertise their property before registration. They can sell only after showing the carpet area and not the super area.

2. Many buyers that Rahul Gandhi met spoke their grief of not getting what was promised to them but it seems that the vice-president of the long lost party has not paid any heed to the provisions of the amendment. One of the most talked about modifications to the Bill is to ensure that the promoters of property cannot change plans and structural designs as promised to buyers without the consent of 2/3rd of consumers of a project. Yes, the UPA has proposed no changes after the purchase but practically changes do happen once the idea is put to practice but that too is regulated by a consent from consumers. Pray tell, how is this anti buyers Mr. RaGa? He seriously seems to be consulting brother in law Vadra for some insight into the Real Estate Bill.

3. The Bill is also to make sure that property brokers are accountable as they have also been made punishable for non-compliance of the orders of Regulatory Authority and Appellate Tribunals to be set under the proposed law. There have been too many cases of fraudulence and delay even after the buyers have paid advances for flats. This amendment will definitely be good for buyers as it will ensure that the brokers are kept in check of the laws that would punish them.

4. The main drawback in the real estate sector has been lack of accountability and transparency. Now that these will be restored we can hope that the realty sector will be enabled to access capital and financial markets essential for its long term growth. A regulatory mechanism for the real estate sector will be good for both the buyers and builders.

5. Strict rules and accounts of transaction between buyers and builders makes the bill good for both. Developers will have to register their projects and disclose all relevant information including schedule of development works, land status, status of statutory approvals, pro-forma agreements, names and addresses of real estate agents, contractors and architects with the Regulatory Authorities to be set up and comply with the same.

6. The problem of fraudulence would be relieved to a great extent if this bill is passed and implemented properly. Builders will now not be able to divert funds of their projects as they will have to deposit 50% of funds collected from buyers within 15 days in a separate bank account to meet construction costs. This provision of 50% has been made after taking into account the cost of land needed to be acquired before announcing a project. The UPA had called for 70% fund deposit but 50% seems a fair side to ensure security. No more earn and run cases.

7. According to the sought amendment list, states will have to make rules within a year, rank of adjudicating officer has been elevated to that of District Judge, web based online system for submitting applications for registration of projects will be introduced within one year of the establishment of Regulatory Authorities and Regulator has to decide cases within 60 days. What more do buyers need to ensure that they are investing safely?

8. The proposed law would also that the bill is implemented and defaulters punished. The penal provisions include payment of 10% of project cost for non-registration and payment of additional 10% of project cost or 3 year imprisonment or both if still not complied with. Additionally, for wrong disclosure of information or for not complying with the disclosures and requirements, payment of 5% of project cost will be imposed. The Bill also calls for regulatory authorities to have the power to cancel project registration in case of persistent violations and decide on the further course of action regarding completion of such projects We have long been in need of such regulatory procedures regarding real estate.

9. Real estate disputes would be occupying a permanent place amongst the thousands of pending cases. Fast track settlement is also included in the bill which makes it even more accountable. Adjudicating officers will be appointed to settle disputes and impose compensation and interest and an appeal against adjudicating officer and Regulatory Authority will lie with the Appellate Tribunals to be set up and final appeals will lie only with High Courts.

Conclusion:

The Real Estate Bill was frames in 2013 but never received voting. Congress could do nothing to even pay heed to it all those years when they happily ruled Turing deaf ears to the pleas of real estate fraud cases and now when Modi government is being active about bringing in good changes for the country, they have started showing keen interest in the matter only to oppose it. If Congress had half the mind to do something worthy for the farmers or middle class, they would be imparting suggestions to the Bill instead of framing accusations based on tokenism and rent a cause methods.