REAL ESTATE BILL – 2013
Press Information Bureau (“PIB”) has recently made a press release (“Press Release”) stating that the Union Cabinet has approved the Real Estate (Regulations and Development) Bill, 2013 (“Bill”). A copy of the Bill is still not available for the public review. However, the Press Release summarizes the object, benefits and advantage of the bill.
- Key objects of the Bill are:
- To provide uniform regulatory environment;
- Protect consumer interest;
- Speedy adjudication of disputes; and
- Orderly growth of the real estate sector.
- Salient features of the Bill are:
- Applicability: The Bill is applicable to the only to residential area. It seems that commercial premises will not be covered under this Bill.
- Regulatory Authority: Each state government to establish regulatory authority (“Authority”) with specified functions and powers to monitor real estate transactions. The function of the Authority is to act as a nodal agency to co-ordinate efforts regarding development of the real estate sector in each of the state.
- Project Registration: Promoter has to compulsorily register his project with the Authority. Further, Promoter shall disclose all details about the project (name, type, plans, partnership companies, names of persons involved with constructions, area for sale based on standardized market). Authority will grant registration to Promoter if it is satisfied that promoter has complied with all the formalities. The Bill also provides punitive provisions including canceling the registration of the Project in case the the Promoter contravenes the
- Agent Registration: All the real estate agents (“Broker”) are also required to be registered with the Authority to sell immoveable property. Further, the Broker will not facilitate the sale of any immovable property which is not registered with the Authority.
- Compulsory Deposits: Promoters will be required to deposit 70 (seventy) percent or such amount as notified by the appropriate state government, realized from the allottees from time to time with the scheduled banks. This amount shall not be used by the Promoter other than cost related to the allottees Project.
- Dispute Settlement Mechanism: The Authority will establish fast track dispute resolution mechanism for settlement of the disputes between the Promoter and the Allottee.
- Real Estate Appellant Tribunal: Appropriate government to establish Real Estate Appellate Tribunal to hear appeal against the order of Regulatory Authority.
- Central Advisory Council: The Council will be set up to advice the central government on implementation on the Real Estate (Regulations and Development) Act, 2013.
Comments: We believe the Bill is introduced to bring evenness and consistency in the reality sector to promote orderly growth in the industry. If the bill if passed by the parliament, it will bring transparency and give tool to the end customer to take action against the Promoters in the event of the Promoters default and reshape the fairness in the reality system.
This update was released on 01 Jul 2013.
Legal Update Team
MANSUKHLAL HIRALAL & COMPANY
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