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Real Estate (Regulation and Development) Bill 2013
Legislative Brief
24/12/2015 1
24th December 2015 CS Sanjay H. Indulkar
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Real Estate (Regulation and Development) Bill back in
2013 is moved in the earlier government regime , The
NDA Government in December 2015 had made major
amendments the Real Estate (Regulation and
Development) Bill 2013. . In the first quarter of calendar
year 2016 maybe Real Estate (Regulation and
Development) Act will likely to come in force and will
be applicable for residential as well as commercial real
estate projects
Amendments in the December 2015
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How it will improve the real estate sector ?
• Improving the scenario of domestic and foreign
investment in the Indian realty sector
• Promoting fair play in the market
• Protecting the interests of buyers and bringing
transparency in the sector.
Present Scenario:
• Construction delays and piling up stock
• No regulatory frame work so every one enter in this
sector
• No confidence of buyers and investors.
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Closer look at bill &major amendments
The Real Estate bills calls for a
regulatory authority to be
established at state (or Union
Territories) levels to regulate
the real estate transactions in
the area..
Impact :
• The foreign investment in the
sector would also rise
• Greater transparency in the
sector
• May be the Government will
be able to make policy on the
affordable housing as the
regulator is at place .
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Registration
Under the new provisions, all
the real estate projects and
also the agents will have to be
registered with the regulatory
authority of the respective
state. Developers will have to
disclose the details of their
project including the approvals
from other government
authorities, status of the land
on which the project will be
developed, layout plans, etc
Impact
Today the this sector is
unregulated after regulator
,majority of the developers
without approved plan and the
project details will exit /or will
not survive in the regulated
market as there are lot of
compliances required from the
developers
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Escrow Account
The developers will have to
deposit 70 percent of their
project cost in an escrow
account.
Impact
Funds from one project should
be utilized to develop the same
and none else. This will
ensure timely construction of
the project and builder will not
able to divert the funds
received for one project to
others
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Disclose important information about their projects
Developers and promoters will
have to disclose important
information about their projects
to the buyers. Any change in
the project design and layout
will not be allowed without the
consent of the buyers.( At least
two-third buyers' consent to be
needed if the developer wants
to alter plans, structural
designs and specifications of
the building.)
Impact
• Delivery of the project as sold
at time of booking the project
no deviation will be allowed
• Project does not adhere to the
project design and area as
mentioned in the agreement to
sale than the builder will have
to face non compliances issue
with the regulator
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Applicability
As per the amendments,
properties with sizes greater
than 500 sq mt (or 8 flats) will
fall under the scope of the law,
as opposed to 1000 sq mt
(or 12 flats) which was the
criteria earlier i.e .before
December 2015 amendments
in the bill.
• Impact
Most of the project will be covered
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The local authorities that
provide certain approvals to
the developers will also be
under the ambit of the law.
Many a times they fail to meet
the deadlines due to a delay in
receiving necessary approval
from the authorities.
Impact
• To protect the developer’s’
interests.
• This may be one of the loop
hole under the law for the
builders to get away of their
non performance
• But now they have a legal
recourse for the same for
delays in the approval by the
local authorities
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Dispute Resolutions and Penalties
• the right to approach consumer
courts ,Civil courts jurisdiction
prohibited from taking up
matters defined in Bill,
however, consumer court
allowed to hear real estate
matters
• A fast track dispute resolution
mechanism will be established
for quick resolution of disputes
among different parties via
Appellate Tribunal and
adjucating officers
Penalties and punishments for
the violation of the provisions
of the bill. If the builders violate
it, they may be imprisoned for
three years. If the buyers or
agents do, they will be
imprisoned for one year.
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Summary
• All developers will have to register their projects with a real estate regulator.
• All states across the country will have one regulator which will settle disputes and impose
compensation. Neither housing nor commercial projects can be launched unless it got registered with
the real estate regulator of the state.
• the ongoing projects, which are yet to receive completion certificates, will also have to abide by the
same rule.
• Developers can't even advertise of their projects without prior registration with the real estate
authority.
• Developers cannot sale properties by showcasing the super area. Instead, the developers will have to
disclose the carpet area before putting any advertisements.
• The regulator authorities will monitor layout plans which should be declared during the time of
registration of the project.
• Developers need to mention all details of contractor, architect, structural engineer, etc. associated with
the project.
• Developers will be responsible for structural defects and they need to refund money in cases of
default.
• Any third party or broker, who are interested to sell flats or an apartment, will be asked to register their
names with the regulatory body. The brokers also will be penalised for non-compliance.
• Developers will have to pay refund with interest to buyers in case they fail to deliver projects on time.
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