"The Real Estate (Regulation and Development) Bill" in the offing
Undeterred by stiff opposition from private developers and builders, the housing ministry is pushing hard to bring the real estate regulator bill, aiming to protect home buyers, in the current session of Parliament. Housing minister Ajay Maken on Sunday said the bill was expected to be brought up for consideration of the Cabinet soon before being introduced in Parliament.
A real estate regulator in every state will ensure that private developers get all projects registered before sale of property and after getting all necessary clearances addressing a major concern of buyers about incomplete or fraudulent land acquisition and pending clearances.
- - - The bill has proposed that private developers and builders would not advertise or start a housing project before getting all necessary clearances and reporting before a real estate regulator. The developers cannot collect any money from buyers before completing all necessary permits to start construction on the project.
- - - The developers will have to maintain a separate bank account for a particular project and will not be allowed to divert the money for other projects.
- - - Before launching a project, developers will have to submit all necessary clearances to the regulator which will be displayed on the regulator's website. Failure to do so for the first time would attract a penalty which may be up to 10% of the project cost; a repeat offence could land the developer in jail, Maken said.
The Real Estate (Regulation and Development) Bill, which seeks to provide a uniform regulatory environment to the sector, was opposed by private developers in totality but the ministry has stuck to it, saying the basic tenet of the legislation is based on voluntary disclosure which will infuse transparency.
- - - As per the legislation, realty players will have to voluntarily disclose project details, including carpet area and open space and contractual obligations on the regulator's website to ensure transparent, fair and ethical business practices. The regulator will act only if there is complaint of any deviation from the project details disclosed by a developer on the regulator's website. Under the bill, there will be a model builder-buyer agreement which is expected to reduce ambiguities in real estate transactions that not many buyers are familiar with. Real estate agents will also be asked to register with the regulator. Agents, an important link between the promoter and buyer, have been an unregulated lot till now. Once they are registered, it will be help in curbing money laundering.
For the full text of the article in the ToI, click here
While interacting with the Dept of Town Planning, GoK, in the matter of updation of the KAOA (Karnataka Apartment Ownership Act), and KOFA (check this), we were contacted by Mr Amit Jain, Director General, Federation of Apartment Owners Association (as well as his colleagues, all based in Delhi), an apex All India body to protect the interests of Group Housing Societies. They have apparently been actively pursuing the Model Real Estate Regulatory Bill with the Ministry of Housing and Poverty Alleviation, from quite some time, and have advised the Hon’ble Minister and its Secretariat on various aspects of this bill.
Our group comprising Sanjay Vijayaraghavan, Ajit Naik, and I are now interacting with them on a regular basis in pursuit of our common interests.
PS: Incidentally, the Federation was linked up to me by noe less than Ms Nisha Singh, Councillor, Ward 30, Municipal Corporation of Gurgaon. She perhaps is the kind of representative that we should be electing.
Muralidhar Rao
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some movement, finally
cabinet approval accorded to bill
submission made to the Rajya Sabha Committee
The following is the text of the mail sent pursuant to the hearings held on the 11th June, In Bangalore:
The Honorable Chairman,
Select Committee of Rajya Sabha on the Real Estate (Regulation & Development) Bill, 2013,
New Delhi
Respected Sir
At the outset, let me thank you for the opportunity given for making my submissions at yesterday's hearings.
My focus has largely been on the following deficiencies in the Karnataka Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1972 (otherwise called Act no 16 OF 1973, or KOFA), and Karnataka Apartment Ownership Act 1972 (otherwise called Act no 17 of 1973, or KAOA), largely from the consumer (buyer)'s point of view:
1) not providing for registration as a simple "association" of buyers, but instead stipulating registration as a Co-operative society or a Company, both of which are not the best suited to the purpose;
2) not identifying and empowering the "competent authority";
3) not clearly outlining the application of the Act and Rules thereunder to staggered developments, particularly those having common assets (like STP) and commercial set-ups like shopping malls, IT parks, marriage/ meeting halls, serviced apartments, etc;
4) not making it mandatory for all multi-storied apartment complexes to be submitted to the provisions of the two Acts;
5) not providing for application of the KAOA by the association, where the promoter has failed to submit a complex to the provisions of the Acts.
On taking up the matter with the state government authorities, they have been stating that they would like to await the passing of the Real Estate Act, by the centre, it supposedly expected to cover all these aspects too, or perhaps enable doing so.
There have been extensive debates on these matters on our blog group (PRAJA), all of which can be accessed @ http://praja.in/hi/node/4448, one of which has recorded 349 comments, clearly highlighting the concern of the home buyers on the lack of clarity on these matters.
As a lay person, as far as law is concerned, I am not quite sure if the new bill draft has covered all of these matters. As such, I would now request you to apply your expertise on the subject to incorporate the necessary provisions to address the deficiencies, in the overall interest of the large sections of home buyers.
Thanking you,
very truly yours,
sd/- Muralidhar Rao
(President, Praja-RAAG)
Copy of the above was also sent to Sri Anil Kumar, IAS, Secretary, UD, GoK, CREDAI, and others.