By: Ravi Sinha
The contour of the Real Estate Draft Bill has been changed to make it a central legislation, a shift from it being a state matter earlier. The focus of the revised Bill is now on consumer protection and contractual obligations of developers. Track2Realty has learnt that the Ministry of Housing and Urban Poverty Alleviation has sought the approval of the Ministry of Law on the proposed legislation.
The law ministry is expected to give its opinion by the end of this month. The concept of a real estate Bill has been around in the government for almost 10 years now, and a draft Bill has been in the making for well over two years.
Although the Consumer Act and penal provisions already exist for grievance redressal, these come into the picture only after commitment is made by developers to property buyers, said a senior official in the housing ministry requesting anonymity.
However, if the Real Estate Draft Bill is approved by the law ministry and thereafter clears the Cabinet and Parliament scrutiny, developers will need to make public disclosures related to land title, project completion date and other relevant scheme details on the website of the proposed regulatory authority, he added.
The disclosures must be made before launching any project, so that consumers are not taken for a ride at a later stage. Also, developers have to register themselves with the regulatory authority.
Following vetting by the law ministry, a draft Cabinet note on the subject will be circulated amongst ministries of finance, home, urban development, consumer affairs and the Planning Commission. The next step will be seeking a Cabinet clearance, after which the draft Bill will be introduced in Parliament. Housing Ministry officials estimate that the draft Bill will be tabled in Parliament later this year.
Certain clauses have been deleted from the original draft real estate Bill to move towards a central legislation. State-centric issues such as building bye-laws and municipalities had been removed from the new draft, an official confirmed. The thrust now is on consumer protection against fraud, timely completion of projects by developers, and contractual obligations of the builder/developer.
The objective of the proposed legislation is to establish a regulatory authority to regulate, control and promote planned and healthy development and construction, sale, transfer and management of colonies, residential buildings, apartments and other similar properties, and to host and maintain a website containing all project details.
As per the draft, the idea is to protect the public interest in relation to the conduct and integrity of promoters and other persons engaged in the development of such colonies. Also, it would facilitate the smooth and speedy construction and maintenance of such colonies, residential buildings, apartments and properties.
As for dispute resolution, the regulatory authority will appoint an officer for amicable settlement of disputes between the promoter and the allottee within two months.