The Government of India’s initiative Real estate bill 2013 has been a lot in news with many people hoping it to change the face of entire real estate market in India. There is another section of buyers and investors who are cynical about the nature and effect of the bill. If you are a prospective home buyer, here is what the bill would mean for you once it is passed.
The Union Government of India approved a Real Estate (Regulation and Development) Bill 2013 that allows the creation of a regulatory body in the real estate sector. Although it is yet to be passed in the parliament and adopted in its entirety, the speculations are already rife with the effect it will have on the property market, the buyer sentiments, the builder’s future plans and the investor’s decisions. One other notable thing about the bill is that it only applies to the residential sector, keeping the commercial real estate out of the purview of its directives.
What does it mean for a home buyer: the Pros?
Timely delivered projects:
Once the bill comes into action, it will provide the buyers much needed respite from bogus real estate developers who keep on advancing their delivery date for as much time as they wish to. These duping developers and the involved real estate brokers will come under scrutiny and will face strict financial penalty. The imposition of strict regulation will ensure that the builders complete the construction on time and along with timely delivery the property is also matching the promised specifications.
Disclosure of details:
Gone are the days when property builders used to take the buyers for a ride by keeping secret the important information regarding the property being sold. The bill mandates a disclosure from the builders regarding every major and minor detail of their projects under construction on the company website. These details include the number of bedrooms, the layout plan, carpet area of every dwelling unit, the amenities being provided, the approvals received and of course the pricing. Providing all these details will now ensure that developers deliver what they promised at the time buyer invested their money in it. If the builder makes ad-hoc changes to their project at the last moment without taking the buyers in confidence then it would be a punishable offense.
Every project to have a separate account:
The Real Estate Bill makes it mandatory for the builders to have a separate bank account with the commercial banks for every of their project. This bank account will serve the purpose of putting 70% of the corpus raised for the project from buyers within 15 days of opening of the account. This will bring in more transparency to the project funding and ensure that developers channelize all the collected funds to the right place without diverting it to another project or some other business interest.
Misleading the buyer will be punishable:
Dubious developers who till now thought they could siphon the hard earned savings of the buyer and could get away with it will be now in for a bitter surprise as the bill ensures that any real estate company found engaged in such unscrupulous activities is punishable. This not only includes pertinent issues like late delivery of projects, or misleading advertising but also after sales defects found in the real estate units.
As per the bill if there is willful deviation from the set guidelines by any of the builders, they will be liable for a financial penalty that may be up to the 10% of the total cost of the project. A harsher punishment can also be inflicted such as imprisonment of three years. Thus the real estate bill 2013 is indeed a relief for the genuine home buyers and investors.
Saurabh Tyagi is a new media enthusiast with professional experience as a blogger. He keeps an eye on the top real estate trends across the different cities of India and pens his thoughts on topics like house for rent in Bangalore, commercial property, and residential real estate.