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Union Cabinet gives nod to Real Estate Bill

  •   Tue, Jun 04 2013 11:11:22 PM

New Delhi, Jun 4 (PTI): A Bill providing for setting up a regulator for the real estate sector and having provisions like a jail term of up to three years for developers who make offences like putting up misleading advertisements about projects repeatedly was approved by the government today.

The Real Estate (Regulation and Development) Bill, approved by the cabinet, seeks to provide a uniform regulatory environment to the sector.

It also intends to make it mandatory for developers to launch projects only after acquiring all statutory clearances from relevant authorities.

Builders and developers who become repeat offenders may even face a jail term of up to three years.

The Bill makes it mandatory for builders to clarify the carpet area of the flat. This would be made uniform for the entire country. This rule would make the concept of super area - which is often used to mislead owners - virtually non-existent.

The Bill has provisions under which all relevant clearances for real estate projects would have to be submitted to the regulator and also displayed on a website before starting the construction, sources said.

The proposed legislation has tough provisions to deter builders from putting out misleading advertisements related to the projects carrying photographs of the actual site.
Failure to do so for the first time would attract penalty which may be up to 10 per cent of the project cost and a repeat offence could land the developer in jail.

The Ministry of Housing and Urban Poverty Alleviation is working on bringing all projects under a single-window clearance. While the Airports Authority of India and municipal bodies have come on board, there are some objections from the Environment Ministry which are being looked into.

Ministry sources said 22 states had given their approval to the Bill while five states wanted certain amendments. These changes have been incorporated in the Bill cleared by the Cabinet today, sources said. Chhattisgarh is the sole state to still oppose the Bill.
Builders and developers will have to get all clearances - from title deed to project cost - cleared before construction begins. FAR (Floor Area Ratio) will also have to be specified clearly by the builder.

While the Regulator in the states will be appointed by the state governments, in Delhi the Urban Development Ministry will appoint the regulator. DDA is likely to be made the regulator in Delhi, sources said.

The Regulator will also be the appellate authority in cases of dispute. This will save the owners the hassle of running around to different authorities for redressal.

The developers will also have to specify the common area in the society. The term "apartment" has been specified in the Bill and will include the space to be provided for a garage.
  

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Comment on this article

  • flavian dsouza, chik/banaglore

    Wed, Jun 05 2013

    Good policies being promoted. There is the food security bill coming soon , there is one which will mandate power of attorney to be notarised so no more illegal transactions thru POA, CIC is now brininging in RTI for all political parties,one more to ensure that tranfers for IAS and senior officers can be done only after certain periodn of time we are making good policies. There is a slight hitch somehow there is no fear among Indians for any laws and somehow we should bring in that fear for us to become a great nation.

    DisAgree Agree [3] Reply Report Abuse

  • Antony Pereira, Mangalore

    Wed, Jun 05 2013

    This act really protects the interest of the buyer.But strict punishments for violating building plan with compulsory set backs & installation of fire fighting equipment s, collection of Service tax, VAT etc and non remittance of the same to the concerned authorities must be seriously viewed & punished. Before launching of any project all the formalities should be completed including building licence & commencement certificate. It is so happens that these Builders and Developers book their projects before launching and only after 75-80% booking only they start the project. This should be stopped and period of completion of the project must be clearly adhered to mentioned in the sale agreement.

    DisAgree Agree [2] Reply Report Abuse

  • Vincent Rodrigues, Katapadi/Bangalore

    Wed, Jun 05 2013

    This act really protects the purchaser's interst.But strict punishment,disqualification required to the defaultihg misleading developers.Hope,this act will censor the illegal real estate business.Thanq.

    DisAgree Agree [3] Reply Report Abuse

  • Valerian Dsouza, Udupi/Mumbai

    Wed, Jun 05 2013

    Dear R.J.MIRANDA,
    The bill is enacted mainly to protect the buyers from erring builders for construction defects, delay in handing over possession and providing lesser than committed amenities.
    There was no such law till no to take action on erring builders. The bill is already passed in the Union Cabinet.
    About unofficial Cash & official payment, unofficial cash payment is not allowed. Still if buyer and seller agree to deal unofficially in cash, law enforcement can't detect.
    But there is a regulation of stamp duty valuation, if transacted valuation is lesser than S.D. valuation, such deals are likely scrutinized by I.Tax.
    Use of black money is curbed to some extent.

    DisAgree [1] Agree [4] Reply Report Abuse

  • A.pinto, Mangalore

    Wed, Jun 05 2013

    Good news after the bad news of match fixing...
    This move will bring out the real buyer and seller,
    The builder will be bound by his commitment and so will the buyer.
    There will be no more road side brokers...
    All will be licensed after training like insurance agents.
    IN ONE SALE I REMEMBER 18 brokers sub brokers and sub sub brokers appeared, At the registrars office.
    NO MORE "GAP" DEEKA

    DisAgree Agree [2] Reply Report Abuse

  • Dinesh Poojary, Kundapura/Bengaluru

    Wed, Jun 05 2013

    Then at least now VADRA can be sent to jail for 3 years? Otherwise no significance to this bill...

    DisAgree [12] Agree [7] Reply Report Abuse

  • rizwan, Dubai/Mangalore

    Wed, Jun 05 2013

    Ab thera kya hoga Mr. Krishna Palemar ????

    DisAgree [1] Agree [4] Reply Report Abuse

  • Bulsam, Mangalore

    Wed, Jun 05 2013

    It is a very good move by the Union Government. Still there are many loopholes that the builders exploit. For example:
    1. When the Balcony is not coming under the FAR hence should it come under the Carpet Area while registering the Area of the Flat.
    2. When the Balconies are not coming under the FAR, the architects and the developers in Gujarat are misusing this law by providing smaller building rooms and larger balconies to them so that to get more FAR because balconies are not coming under the FAR. To stop this practice it is better to include the balconies within the FAR.
    3. The Structural Engineer of the project plays a greater role in the strength of the building structure hence their leniency or to save the steel for the developers will put the structure into danger and building will have short span of life.
    4. Further, the Structural Engineer who has not registered at the Municipality or Municipal Corporation should not be authorised to sign the Building Submission Plans. The utive Engineers in the Municipality or Municipal Corporation should cross check the steel distributing strength of the structural that was designed by the structural engineer in the submitted Structural Plans.
    5. Creating a Club House on the terrace top should be made compulsory so that the entire building terrace will be covered by metal Sloping Roof hence there will not be any leaks from the terrace to the top floor flats of the future projects.

    DisAgree Agree [9] Reply Report Abuse

  • R.J.MIRANDA, MANGALORE

    Wed, Jun 05 2013

    No word about the difference in market price and official price of property, being paid in hard cash, and hence supporting the black money sector along ? Lowering the price in the registered deed for saving the duty, and hence circulating the black money has become a norm in the real estae buisiness. Union Cabinet,Please do something about this before you forward it to the parliament.

    DisAgree Agree [3] Reply Report Abuse

  • Valerian Dsouza, Udupi/Mumbai

    Wed, Jun 05 2013

    Very Good, and long wait, Real Estate Bill got passed.

    Even a small FAN and Mixer or Cooker manufacturer for the product valued between Rs.1000/- - 3500/- are bound by defect liability period cover to customer.
    Whereas Builders selling flats to buyers worth lakhs and crores were not bound by any law for defect liability period or time bound possession.
    Buyers were solely at the mercy of sellers.
    Finally Real estate bill is passed.
    Good one like bringing political parties under RTI Act.

    DisAgree Agree [10] Reply Report Abuse


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