The Goods and the Bads of Cabinet approved amended Real estate Regulatory bill

The amendments in eagerly awaited Real estate bill was approved by central cabinet this week. While there was some improvement over the last version, it is still a much toned down version of the original drafted bill.

We discuss the Pros and the Cons of Real estate bill:

Pros:
-Builders wont be able to modify the site layout and plan without the consent of at least 2/3rd of total buyers. However, its strict implementation is required. Builders and Authorities alike have found very good way of tweaking tougher clauses in UP Apartment act 2010 dealing with modification in layouts.
-Disclosure of project information made mandatory. Already part of UP Apartment act 2010 but not effectively implemented.
-Real estate agents will be more accountable due to registration requirements.
-Builders to rectify structural defects till 2 years from date of possession.Already part of UP Apartment act 2010.
-Fast track dispute settlement through identified district adjucating officer and Appellate Tribunal.

Implementation is going to be the key as a stronger state act like UP Apartment act 2010 has already fallen flat due to its ineffective implementation.

Cons:
-Builder needs to disclose carpet area but basis of sale could still be super area.
-Does not touch force majeure explanation giving enough escape route to builder in case of delays.
-Does not talk about cost escalation or flat area increase and its implication.
-Only 50% compulsory deposit in proposed escrow account which was originally proposed as 70%, implying builders will have enough funds to siphon off.
-Promoter not held responsible for defects other than those structural in nature (eg. Quality defects).
-Specifically allows minor additions or alterations to plans with potential of misuse.
-Jurisdiction of court other than identified authority and consumer court barred for property cases.

The following links have further details of the original bill and amendments

Original Bill:
http://www.prsindia.org/uploads/media/Real%20Estate/Real%20estate%20Bill.pdf

Amendments approved by cabinet:
http://www.pib.nic.in/newsite/pmreleases.aspx?mincode=61s

Comments/Feedback invited.

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Last Updated on April 9, 2015 by Go4Reviews