New Delhi, March 15: The Real Estate (Regulation and Development) Bill was passed by the Lok Sabha on Tuesday. The bill was passed by the Rajya Sabha last week. The Bill regulates transactions between buyers and promoters of residential and commercial real estate projects and is aimed at protecting the interests of the large number of aspiring house buyers while at the same time enhancing the credibility of real estate sector by ensuring transparency, accountability and efficiency in execution of projects. The Bill provides for setting up of a regulatory authority for the sector.
It establishes state-level regulatory authorities called Real Estate Regulatory Authorities (RERAs). The promoters will have to register all projects above a certain size with the RERAs.
During the debate, the members raised their concerns about the provision of the Bill mandating 70 percent of the amount collected from buyers of a project to be used only for construction of that project. The members also raised their concerns about other related issues with the sector such as streamlining the procedures of approval and black money. According to the bill, builders will have to deposit 70% of the money paid by buyers in a separate account towards the cost of construction, including that of land, in order to protect the rights of consumers and curb the diversion of funds.
The Bill, which aims at protecting the interest of the buyers and bring in transparency to the system, has been waiting in the wings for nearly 10 years. Moving the Bill for the passage in the House, Urban Development Minister Venkaiah Naidu said under the bill the promoters and builders will have to disclose project information including details of the promoter, Land, status of approvals, agreements with real estate agents and contractors.
He further said Bill will bring transparency and provide level playing field in the real estate sector. Initiating the discussion, Congress MP K C Venugopal said the bill is the need of the hour to fulfill the dream of home buyers particularly poor. He also requested the Minister to remove the requirement of mandatory restrictions for registration of 500 Square meters housing projects.
Later, replying to discussion, Venkaiah Naidu said the legislation will help in attracting more investment in real estate sector besides lowering down the prices of home in the country. The Minister also urged the state governments to come forward to implement the legislation. He also urged the states to be pro-active in land clearances so that aim of housing for all by 2022 can be achieved.