Real Estate bill cleared in Rajya Sabha: All you need to know about the much-awaited law

Here's is an all you need to know about the bill:

1) The the Real Estate (Regulation and Development) Bill regulates transactions between buyers and promoters of real estate projects and sets up state-level regulatory authorities to oversee the sector, according to PRS Legislative.

2) The Bill was approved for introduction in the Rajya Sabha by the UPA Cabinet in June 2013. However, it was referred to the Standing Committee which submitted its report in February 2014. After the NDA government was formed, the bill was again referred to a Select Committee of Rajya Sabha, which submitted its report on July 30 last year. In December 2015, the cabinet approved the Bill, as reported by the Select Committee of Rajya Sabha. The NDA government had earlier watered down a few provisions in the bill, to which the Congress objected.

3) Salient features of the Bill are as follows:

a) The Bill regulates both commercial and residential real estate projects. It seeks to set up Real Estate Regulatory Authority (RERA) in states and union territories to oversee real estate transactions.

b) It makes registration of real estate projects and real estate agents with the authority mandatory. It mandates that builders should disclose details of all registered projects, including those about the promoter, project, layout plan, land status, approvals, agreements along with details of real estate agents, contractors, architect, structural engineer etc. All these details should be uploaded on the website of the RERAs. Real estate agents also need to register with the RERAs.

c) PRS notes that the bill makes it mandatory for the builders to park 70% of the amount collected from buyers for a project in a separate bank account. This must only be used for construction of that project. However, The state government can alter this amount to less than 70%.

d) It seeks to establish fast track dispute resolution mechanisms for settlement of disputes through adjudicating officers and Appellate Tribunal. The bill bars civil courts from taking up matters defined in it. However, consumer courts are allowed to hear real estate matters. There are 644 consumer courts in the country. The more avenues for grievance redressal would mean lower litigation costs for the buyers. Promoters are barred from changing plans and design without consent of consumers.

e) If the promoter does not register his property, he will have to pay up to 10 percent of the project cost as penalty. If he dodges order issued by the RERA, he faces imprisonment for up to three years, and/or an additional fine of 10% of the estimated cost of the project. In case the builder violates any other provision of the act, he will have to pay up to 5 percent of the estimate cost of the project, reckons PRS Legislative. Meanwhile, the fine for the agents is Rs 10,000 per day during the period of violation of provisions.

4) Once in place, the bill is expected to boost consumer confidence as it is expected to ring in transparency in the sector. At present, a slowing down home sales is taking a toll on the economic revival. According to consultancy firm Knight Frank, home sales have declined 4 percent in 2015, with an unsold inventory of about 7 lakh units.