7 Things to Know About Real Estate Regulation and Development Bill 2015

Real-Estate-Development-and-Construction

Real Estate Regulation and Development Bill 2013 aims at providing a platform for the sale of immovable property in a transparent and efficient manner. It promotes fair play in real estate transactions and emphasizes on timely delivery of projects to protect consumer interest.

Major clauses in the bill that can influence the real estate sector:

  1. Developers will have to register their projects with a real estate regulatory authority, without which sale, booking or even offer to sell is not permissible.
  2. Promoters will have to disclose standard details of the project, along with names of brokers who would represent the project.
  3. Developers will sell the project only after all necessary approvals are in place and the project has been registered with the authority. The Regulatory Authority will have to clear or reject projects within 15 days.
  4. Developers have to open a separate bank account (escrow account) for each project and will have to set aside 70% (or less as per local authority) of the buyer’s money. This amount can be used only for the construction of that particular project.
  5. To check delays in delivery, the bill empowers buyers to cancel booking and claim the full amount, along with interest for delays in the project.
  6. To increase transparency, the bill has proposed penalties of 5% to 10% of project cost and jail term of up to three years for misrepresentation of facts to customers or non-compliance.
  7. The Bill has proposed setting up of an appellate tribunal, which will hear real estate cases and will have the powers of a civil court. It also proposes setting up of a central and state level real estate regulatory authority to exercise the powers conferred on it and perform functions assigned under the Act.

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