3/19/2016 Real Estate Bill passed in Rajya Sabha ­

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Real Estate Bill passed in Rajya Sabhaby Chhavi Vashishtha 1 week ago

The Rajya Sabha on Thursday passed the Real

Estate (Regulation & Development) Bill. The Bill

aimed to regulate India’s real estate sector, will

help in protecting home buyers’ rights by

bringing in transparency.

The Government expedited the passage of the

Bill in the Upper House after renewed interest

shown by the Congress, after its Vice President

Rahul Gandhi, who told concerned home

buyers last week that his party will support the Bill. The Congress party also wrote to the PM,

urging to prioritise the Bill in the ongoing Budget session of the Parliament.

Based on the feedback of a parliamentary committee, the Government included 20

amendments to the Bill, which 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 the real estate regulator which will monitor

transactions and also settle disputes. The Bill becomes very significant in the wake of the

increasing number of delayed projects in recent years.

The Bill proposes to cover a larger number of projects for registration – any project including

eight flats or 500 square metre will come under the purview of the Bill.

Real estate developers will have to deposit at least 70 per cent of money collected from

buyers in an escrow account to meet construction costs, compared with the earlier proposal

for 50 per cent. This is to ensure that developers do not run out of cash during the

construction of the projects. The Bill also stipulates builders to pay interest to home buyers

for any default or delays at the same rate they charge the buyers on delayed payments.

For any structural defects instead of two years proposed initially, the developers will now be

liable for five years.

Real estate sector’s reaction to RERA Bill

UNION BUDGET 2016-17

Overall direction positive,but few facets ignoredAman Nagar | | Paras Buildtech

Disappointing forindustry mainly for sectorRK Arora | | Supertech

Relief to housing sectorhopes not metDeepak Kapoor | | Gulshan Homz

Focused on some keyissues which is positiveManoj Gaur | | Gaursons

The Union Budget augerswell for real estate sectorShishir Baijal | | Knight Frank India

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3/19/2016 Real Estate Bill passed in Rajya Sabha ­

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Kashi Nath Shukla Chairman MD Tashee Group Tashee Group,“The new version of the Real Estate Regulatory Bill will bring more

transparency to the sector that balances the currently skewed builder­

buyer power equations. The Bill is indeed a powerful means to make

the chronically opaque Indian real estate sector more transparent. It

will also boost domestic and foreign investors to help promote private participation to

achieve the target of Housing for all.”

Aman Singh Gehlot, Director, Ambience Group said, “We do

welcome the setting up of regulatory authority for the real estate

sector. The buyer confidence, which was shaken, will now come back

with this crucial step taken by the Govt of passing the Real Estate Bill

today. The real estate market, which has been plagued by numerous

problems like approval hurdles and delay in projects, will also

improve. The regulatory bill will play an integral role in not only in safeguarding interests

of buyers/ investors but also of developers across the nation and ensure consistent

growth for real estate industry.”

Gaurav Gupta, General Secretary, credai RNE said, “The realestate Bill seeks to address some major concerns of the industry

and protecting the interests of home­buyers. The Bill would

improve the customer sentiments as the Bill includes measures to

ensure buyers protection and standardisation of business

practices. The Bill will be a watchdog for the malpractices and

fraudulent activities of the sector. Overall the bill will be of great help to both the buyers

and builders. However approval authorities should also be bring in the ambit of bill as

many times they are responsible for project delays. The provisions like depositing 70 per

cent of the receivables in escrow account, bringing commercial segment under the Bill,

establishing state level regulatory authorities, interest on delayed possessions etc would

help home buyers in a big way.”

Manoj Gaur, President credai NCR & MD, Gaursons India Ltd.said, “The need for real estate Bill has been felt since long time in

this unorganised sector. This is an important development

towards the regulation of realty sector and to provide relief to the

home­buyers. The amendments which were made to the bill last

year aimed to promote transparency, greater accountability,

protection of home­buyers & investors, and efficient working in the

sector. The passage of bill will also result in authentic players remaining in the market and

non­credible ones exiting due to stringent checks that would be brought by the bill. But it

is also important that the bill needs to be a balanced one which is agreed upon by both

buyers as well as builders. It is important to fix the accountability of approving authorities.

This is important step towards avoiding delays. Bringing government agencies and

authorities under its ambit would be beneficial to developers too. This would ensure that

there will be a dedicated authority to deal with all the grievances. Overall, the bill once

implemented will boost customer confidence and change the complete gamut of real

estate workings”.

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3/19/2016 Real Estate Bill passed in Rajya Sabha ­

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Prashant Tiwari, Chairman, Prateek Group said, “The Bill oncemade a law will not only protect property buyers but will also

boost investments in the sector. As the Govt has already brought

amendments in the Bill like regulating both commercial and

residential properties, maintaining an escrow account, establish

fast track dispute resolution mechanisms for consumer

grievances, preventing builders to make changes in layouts and plans etc. The builder

community will also be benefitted as the bill would promote fair play in realty transactions.

This would also help in distinguishing the work of sincere ones and the fraudsters. The

law will be a brand builder for those developers who are genuine and work to deliver

quality projects in specified timelines.”

Om Chaudhry, Founder & CEO of FIRE Capital and Chairman& CEO of Astrum Value Homes said, “Real estate Bill will helpimprove the sentiments of home buyers by boosting their

confidence level and making them more comfortable while buying

properties. The property buyers would rest assured as a result of

the protection provided from any possible exploitation in the

hands of builders. Measures like depositing part of the sale

proceeds in an escrow account, interest on delays in project completion, time limits for

resolving customer complaints etc. would bring much­needed relief to the home­buyers.

The Bill will bring more transparency in the working of the sector by promoting

professionalism and standardisation of industry practices. Along with improved customer

outlook and enhanced growth, the sector will also witness a better working environment

for builders too. Besides implementing the Bill, Govt should also bring out some

administrative reforms to speed up approval processes to avoid project completion

delays”.

Deepak Kapoor, President credai Western UP said, “Onceimplemented, the Real Estate Regulatory Bill will not only change

the way real estate works but will also be beneficial to all the

concerned stakeholders. The bill will act as a protector of home

buyer’s interest and will help in building such brands in the market which will be known for

quality and timely deliveries. There are key features of the bill like maintaining an escrow

account by builders, barring developers from making changes in the construction plans

etc which will are in the interest of customers. The regulator will also bring some

consolidation between organized and un­organized players in the market, boosting the

confidence level of customers. The bill is welcomed to become a law but it must be fair in

nature as well to avoid hindrances and confusions.”

Sanjay Rastogi, Director, Saviour Builders Pvt. Ltd. said, “TheReal Estate and Regulatory Bill, as the name suggests would be

a regulator of the entire real estate sector which at present is

unorganised. Real estate bill will be a welcome move, as it will not

only change the way how real estate sector functions but on the

other hand it will also benefit all the parties involved in realty

transactions. The Bill will bring uniformity and transparency in the

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working of the sector. To protect home buyers interest, the Bill has several clauses to

bring the much­needed relief to the stressed customers. By bringing in some strict rulings,

the Bill will also make shady and treacherous builders to move out of the market”.

Arvind Jain, Managing Director – Pride Group, said, “The realestate regulatory Bill has been long in the pipeline, and has now

cleared all roadblocks and become a law. Various decision

makers involved in it had been ambiguous about their stance

towards this vital regulator, and as a result it remained pending.

Now, it has finally received the green signal and is all set to

revolutionise the Indian realty market. It will empower consumers by giving them

confidence while making their real estate investments. It imposes strict regulations on how

developers conduct their business, and underwent various redrafts aimed at doing this. It

is very encouraging that the bill is now a reality.”

Kishor Pate, CMD – Amit Enterprises Housing Ltd, said, “Thereal estate needed the Real Estate Regulatory Bill more than any

other single piece of legislation, even though GST, the Land

Aquisition and Rehabilitation Bill, single window clearance and

industry status are by now means of less importance. The

industry has been in express need of an apex body via which all

concerns of consumers can be addressed transparently and

efficiently. We will now see a radical transformation of the entire residential sector. Strict

enforcement of project delivery timelines, verifiable construction quality and assurance of

legal clearances will finally become a reality, and the consumer confidence which had all

but evaporated will return. It is a most welcome development.”

Anil Pharande, Chairman – Pharande Spaces said, “The Indianreal estate sector has historically been unregulated and

disorganised. Unfortunately, the unorganised segment has so far

represented the largest share of the market, and it is in this

segment that consumers have in innumerable cases been held

hostage to by unscrupulous practices of ruthless developers. The

real estate regulatory bill was drafted with a vision to give clarity and assurance to real

estate buyers via various strictures. Now that it has become an enforceable law, it will

have a profoundly positive effect on how both domestic and global investors view Indian

real estate. More importantly, it will give homebuyers a strong measure of assurance.”

RK Arora, Chairman, Supertech Ltd., & Member credai,said,”The Real Estate Regulator Bill passed today by the

Parliament is a significant step towards bringing transparency and

financial discipline in real estate sector and it would secure the

interests of home­buyers. The legislation would definitely provide

clarity to the buyers on various aspects of housing projects at the

time of investing in the project as it is mandatory for the developer

to post in advance all information on issues such as project plan, layout, government

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approvals, land title status, contractors to the project, schedule for completion with the

State Real Estate Regulatory Authority. It is also a welcome step that the Regulator will

promote single window clearances which is vital for the timely implementation and

delivery of projects. Further, the provision for giving infrastructure status to the industry

would bring confidence to the real estate sector and the industry. We welcome the new

legislation”

Dhruv Agarwala, CEO & founder, PropTiger.com, said, “As asector that lacks clarity and is riddled with legal disputes between

consumers and developers, passage of Real Estate Regulatory

Bill comes across as a much needed wave of hope. Delayed

possession of properties has been a major cause of trust deficit in

the space and has kept potential consumers away for a long time

in case of long term projects. However, State­level Real Estate Regulatory Authorities

(RERAs) are now expected to ensure timely completion and handover. Homebuyers will

be able to know the status of the land, site and layout plan, schedule for completion, and

details on approvals from various Government agencies which will lead to increase in trust

which in turn could lead to a revival in the sector.

Further, clarity on carpet area would eliminate a major concern area. However, the Bill has

its share of shortcomings as well. It includes a provision for developers to maintain 70 per

cent of the money collected from buyers in an escrow account towards cost of

construction. But what if the cost of land is more than 30 per cent and cost of construction

lower than 70 per cent? In large Indian cities, land is very expensive, and this is often the

case. When this happens, funds collected from homebuyers may not be utilised, and

developers may be forced to raise funds from other sources. But apart from some minor

points, which would need further discussion the bill would certainly be of great help in

protecting the interest of buyers and bring more transparency to the sector by making

developers as well as intermediaries more accountable.”

Prashant Solomon, Managing Director, Chintels, said, “I welcomethe idea of a regulator as this will lead to better transparency in the

industry. What I am not happy about is that the government authorities

have not been included in this bill. We know that many delays in the

projects happen because of the tedious nature of getting approvals. In the long run unless

govt. authorities are not regulated this will not benefit the end users or developers.

Kushagr Ansal, Director, Ansal Housing said, “We are now just

one step away from receiving probably the biggest news for the

real estate sector with Lok Sabha to give a final word on it.

Developers will now have to park 70 percent of the amount

collected from the buyers of the project in a separate bank

account. Also, marketing and selling of the projects will be based

on carpet area basis and not super area basis, thus justifying the

amount which the buyers pay for a property.”

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Ashok Gupta, CMD, Ajnara India Ltd. said, “It is very imperativeto understand that the demand and respect of real estate sector

has been moving downward for several years now attributing to

the negatives pertaining in this sector such as fraud committed by

several builders, possession delays and absence of a monitoring body, and this will

continue if proper action is not taken. With this bill in place, every state will have a

regulator who will be continuously supervising and monitoring. Moreover, the projects will

now be completed on time and developers will have to submit all the layouts, plans and

documents with the regulator who will ensure transparency and hence, customers will feel

more secure while transacting.”

Amit Modi, Director, ABA Corp and Vice President CredaiWestern UP said, “A regulator to curb malpractices in the realestate sector is welcome hence we whole heartedly welcome this

Bill but we still feel a law without making all the stakeholders

concerned accountable, will not be able to help the purpose at

large. Projects are often delayed due to graft in the issuance of

permits and clearances.

Government agencies issuing permits should be brought under the law and made

accountable for undue delays. On an average it takes 2­3 years to start a project after

land is acquired; by this time the cost of land rises by 24­30 per cent due to hefty interest

payments as bank loans are not available for procuring important raw material in this

sector. The added cost ultimately gets passed on to the customer. These costs can be

curtailed and passed on to the consumer, if developers can start building faster and also

deliver larger volumes quicker for the consumer.

Harshvardhan Neotia, President, Ficci, said, “The passing of RealEstate Bill, 2016 in Rajya Sabha is a landmark step towards

enhancing the credibility of construction industry by bringing in

transparency and accountability in execution of projects. I hope this

bill will put in place an effective regulatory mechanism that would

safeguard the interest of consumers as well as provide protection against fly by night

operators. The passing of bill should enable timely approval and execution of projects

which will raise the confidence of consumers and also give a huge boost to the growth of

real estate sector.”

Manoj Kumar Singh,Chairman,Mangalya Group said, “We welcome

the successful passage of the Real Estate (Regulation and

Development) Bill in Parliament. The legislation will go a long way in

reducing frauds and malpractices indulged in by unscrupulous realty

players. It will act as a major deterrent to fly­by­night operators who

bring a bad name to the sector. By bringing in transparency and best

practices in the real estate sector, the regulatory Bill will safeguard the interest of both the

buyers as well as the developers. We hope now the property market will gain the much­

desired momentum with renewed interest and trust of buyers in realty projects.”

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Anita Arjundas, MD, Mahindra Lifespace said, ‘We welcome the

passage of the Real Estate Bill, which seeks to restore buyer confidence

with a strong thrust on transparency and accountability. Speedy action

on single window approvals will enable more efficient use of capital and

also support timely delivery.’

“We appeal to the government for the faster proceeding in the matter as

the Bill has already been delayed by many years. Also, it seems, that the

clause to deposit 70 per cent of the funds received from buyers would

definitely pose financial challenge for builders,” opines Praveen Jain,President, NAREDCO.

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