The Real Estate Regulatory Bill, which has been cleared by parliament, is likely to provide big relief to home buyers. The bill will increase transparency and accountability in the realty sector, which is notorious for opacity and delays.
Once the new rules come into effect, home buyers will be able to make an informed decision because they will have access to full project details. All projects - commercial and residential - have to be compulsorily registered with the regulator.
"Now the home buyer will get into a project with an open eye as all the documents relating to the approval of the plan, documents related to the property, etc. will be made available by the regulator," said Niranjan Hiranandani, CMD, Hiranandani Group.
Gulam Zia, executive director of Knight Frank, said, "Consumer always had a raw deal as the kind of contracting or agreement between the buyer and the seller were always a big bone of contention, this bill is expected to bring in a lot of clarity on that."
"The interest payout used to be lopsided, the developers charge 18 per cent on an average in case of delayed payment but not used to pay more than 4-5 per cent," he added.
As per the bill, consumers as well as developers will pay penalty at the same rate in case of default by either of them.
The bill requires the developer to sell the property as per the carpet area that includes space like kitchen and toilets. Parking will have to be sold separately. Currently, developers generally sell property based on super area (flat area plus common area).
Also, there are strict penalties in case the developers don't adhere to regulations. The promoters will be subject to imprisonment for up to three years and real estate agents could be imprisioned for up to one year, or there could be monetary penalties or both, in case they fail to adhere to the orders of appellate tribunals.