The Real Estate Regulator Bill was passed in the Upper house of the Parliament on Thursday and this bill is seeking to help those builders who deal with real estate projects. A Real Estate Authority is also to be set up in States and Union Territories so that the problems of the builders come into limelight and the Government can help them out. It will help to regulate the real estate sector and there will be more clarity in the working of the sector. People who work in the reality projects will have to follow guidelines, rules, and regulations to be a part of the sector. Reform changes are being expected in the real estate sector, which can be brought forward by the bill.
Some of the advantages of the Bill are listed as under:
Merits of The Real Estate Regulator Bill
1. Registration with the regulator
The new bill has made it mandatory that any real estate projects that are spread over a land of more than 500 sq. metre has to register themselves with the regulator before they can continue with the project. The registration is made mandatory so that there is more transparency in the project marketing. Failure of registration will lead to 10 % penalty of the project cost.
2. Money in separate account
All those agents who collect money from the buyer will keep 70% of the money in a separate account so the construction cost is met in the project. State can increase the ceiling given but it will not be lowered. This step is taken so that the developers do not divert their mind to a new project repeatedly and complete the first one.
3. Stabilizing of housing prices
The housing prices will be stabilized with the help of this bill. The sector will lead to more enhanced activity. There will be more investment in the sector, the high prices of houses will be stabilized, and people can buy it at reasonable rates.
4. Restrictions on promoter
There will be strict restrictions on the promoter to complete work on time. The buyer should get the house as per their requirement and according to the time that they are being told. The promoter will not get enough ways to not complete work on time.
5. Meaning of carpet area
In the earlier times, there was no clarity about the concept of carpet area. Nevertheless, with the introduction of the bill, carpet area will include the space of the kitchen as well as toilets will also be included in the carpet area that will impart clarity in the meaning.
6. Repair in defects
The time period for the repair in defects have been increased from 2 years to 5 years. Any defects will get a period of 5 years to renew. In addition, the promoters have to work in time regarding defects.
Demerits of Real Estate Bill
Apart from the advantages, there are certain disadvantages for the common people when they go for buying a home. Some of the disadvantages are listed as under:
7. Adverse effect on the demand supply gap
The growth in the sector will be adversely affected because it takes around 2 years for the permission to receive the promoter. If a promoter is able to build five projects in a span of 5 years, now they will be able to make just two or three. In this way, the demand and supply gap is affected to the lot. The smaller builders will have to face the effect of this bill. They will not be able to earn money in this case.
8. Delay in approval of government agencies
There is not restriction on government body and if they do not pass the approval in time, then the builders will have to suffer a lot of loss. The clearance time of the government is according to their wish and this will have bad effects on the sector. It is the duty of the government to complete work in time and submit the approval according to the needs of the builders. Only then can the new projects run smoothly.
9. No regulation for projects less than 4000 sq. metre.
There is a regulation for projects above 5000 sq. metre but no regulation has been made below that level. There are many small builders who will escape from the regulation and control of the government and they can take heavy amount from middle class people and not complete work on time. In metro cities, the area of work is anyway small because of lack of larger area for people due to shortage of land. They might also say false rates to customers and customers can be fooled.
10. Past estates excluded from the list
The bill will not provide any kind of information for the past estate bills. Those projects, which are stuck in the clearance centre and did not get clearance, are all excluded from the bill. This is a big disadvantage because those builders will suffer a lot and the government will not listen to them. Many buyers will fail to get benefit in the new bill.
The bill has mixed reactions among people. No one knows whether it will be a boon or a curse to the nation. Nevertheless, the best is expected. Some parameters are knew and hope they help the people to the lot.