Real Estate Bill 2016 Benefits, Details of Real Estate Bill,Rules & Features
Real Estate Bill 2016 has been introduced to establish the Real Estate Regulatory Authority (RERA) for regulation and promotion of the real estate sector and to ensure sale of plot, apartment of building, as the case may be, or sale of real estate project, in an efficient and transparent manner and to protect the interest of consumers in the real estate sector and to establish an adjudicating mechanism for speedy dispute redressal and also to establish the Appellate Tribunal to hear appeals from the decisions, directions or orders of the Real Estate Regulatory Authority and the adjudicating officer and for matters connected therewith or incidental thereto.
Real Estate Regulatory Authority (RERA) Bill was introduced by the Indian National Congress government in 2013. In December 2015, the Union Cabinet of India had approved 20 major amendments to the bill based on the recommendations of a Rajya Sabha.
This Act may be called the Real Estate (Regulation and Development) Act; 2016. It extends to the whole of India except the State of Jammu and Kashmir.
The Real Estate (Regulation and Development) Bill was passed by the Rajya Sabha on 10th March, 2016 and by the Lok Sabha on 15th March, 2016.
Real Estate Bill 2016 –Salient Features
- Act extends to residential and commercial real estate
- Registration of Real Estate Projects with Regulatory Authority 500 square meters and above or 8 apartments and above
- Registration of Real Estate Agents who intend to sell any plot, apartment or building-which is required to be registered with the Regulatory Authority
- Promoter to make disclosure of all relevant project information for public view such as- Details of promoters, layout plan, plan of development works, land status, status of the statutory approvals, number of parking, time period for project completion etc
- Proforma of agreements to be entered into with the buyers
- Names and addresses of agents, contractors, architect, engineer etc.
Promoter also comply with the following
- Adherence to approved plans and project specifications
- Obligations regarding authenticity of the advertisement or prospectus
- Rectify structural defects
- Refund money in cases of default
- Compulsory deposit of 70% of the amount realized from allottees in a separate account to cover the cost of construction and land cost.
Penalties for the Promoter
- If promoter does not register his property: Penalty up to 10% of the project cost.
- If promoter dodges order issued by the RERA: Imprisonment for up to 3 years, and/or an additional fine of 10% of the estimated project cost
- If promoter provides false information: Penalty up to 5% of the estimated project cost.
- If promoter violates any other provision of the act: Penalty up to 5% of the estimated project cost.
- Fine for the agents is INR 10,000 per day during the period of violation of provisions
Act provides for establishment of Regulatory Authority in each State/UT, or one Authority for two or more States/UT, by the Appropriate Government for implementation of Act.
Act provides for establishment of Appellate Tribunal to hear appeals from the orders of the Authority & adjudicating officer.
Impact of the Real Estate Bill 2016 on the Real Estate Industry
- Ensures efficiency and transparency in all property related transactions
- Improves accountability of the developers and protects consumer interest.
- Promotes fair-play and timely execution of the projects.
- Helps in differentiating a good developer from a bad one
- Single window clearance will aid faster execution of the projects.
- Boosts positive sentiments among the buyers and will in turn bring more FDI.
- Timely completion will result in increase in supply of homes and help bring down prices.
- Overall boost to the economy as housing sector has many backward and forward linkages with other industries.
- Backward Linkages: steel, cement and other building materials
- Forward Linkages: furniture and furnishings, electrical and electronics, interior decoration
- Creation of more employment opportunities
- It will help achieve government’s ambitious plan of ‘Housing for All by 2020’.
- It will help curb black money as real estate sector constitutes about 11% of GDP and is particularly vulnerable to black money through underreporting of transaction prices while paying taxes.