The Union Cabinet on Wednesday approved several amendments to the Real Estate (Regulation and Development) Bill, 2015 aiming at protection of interests of buyers as well as promoting investments in the sector.
These amendments were based on the recommendations of the Select Committee of Rajya Sabha which had examined the Bill and the official amendments proposed earlier. The Bill will now be taken up for consideration and passing by Parliament. It facilitates the establishment of ‘Real Estate Regulatory Authority’ in States/UTs to regulate transactions. Real estate projects and real estate agents need to be registered with the Authority. Commercial projects are also under the ambit of the regulator now, an official statement said.
Developers will need to submit disclosures of all registered projects, including details of the promoter, project, layout plan, land status, approvals, etc. The amendments include mandatory registration with Real Estate Regulatory Authorities of projects of 500 sq m area or 8 flats instead of 1,000 sq m or 12 flats earlier proposed, bringing more projects under the ambit of the Bill.
“Moreover, developers will need to deposit 70 per cent of the sale proceeds (including the land cost) in a separate escrow account to meet the construction cost,” an official from the Ministry of Urban Development told BusinessLine.
In case of default or delay, promoters and buyers will be required to pay an equal rate of interest.
New provision for imprisonment of up to three years in case of promoters and up to one year in case of real estate agents and buyers for violation of orders of Appellate Tribunals or monetary penalties or both has also been included.