NEW DELHI: Rajya Sabha today passed the Real Estate Bill, aimed at protecting home buyers from real estate developers who fail to deliver on time, and regulating India’s murky real estate sector.
The government had fast-tracked the proposal based on the renewed interest shown by the Congress, the main opposition party, in getting the proposal cleared by Parliament. Congress vice-president Rahul Gandhi had told concerned home buyers that his party will support the bill. Last week, the Congress wrote to the PM, asking for the bill to be prioritized in this session of Parliament.
The version that the government submitted for discussion included as many as 20 amendments or changes, based on the feedback of a parliamentary committee. The first version of the bill was rejected by the Rajya Sabha last year.
The Real Estate (Regulation and Development) Bill makes it mandatory for residential and commercial projects to be registered with a real estate regulator which will monitor transactions and settle disputes. In recent years, several projects have been delayed, leaving home buyers in the lurch with no protection.
The new proposal covers a larger number of projects for registration -any project that includes eight flats or 500 square.
Builders will have to deposit at least 70% of money collected from buyers during pre- sales, including land cost, in an escrow account to meet construction costs, compared with the earlier proposal for 50%. This is to ensure that developers who run out of cash don’t stall projects. Builders would have to pay interest to home buyers for any default or delays at the same rate they charge them.
Builders will be liable for structural defects for five years, instead of two years as proposed earlier. They will also have to pay interest to home buyers on delays at the same rate that customers would be charged if they defaulted on payments.