Real Estate Bill

Recently Indian Parliament  has passed Real Estate Bill which would be notified after seeking President nod and thereafter Real Estate Bill would come into force. The intension of the Bill is to protect Customers interest as much as possible and to bring entire building faculty within one law. In nutshell it is an attempt to streamline the construction faculty.
 

The salient feature of the Bill in nutshell is :
 

1. It is mandatory for the Builder/s to get them registered before Municipal Corporation, Counsel and/or such Statutory approving planning Authority.
2. It is mandatory for the Builder/s to create their own website and put up on said website the layout plan of the property and the sanctioned plan of the buildings so as to enable the buyers to know whether Statutory Authority has sanctioned layout plan and building plan. This provision would help the buyers to know while booking a flat/s, commercial premises, units etc., whether the plan of the said flat/s, commercial premises, units etc. and the floor and the building is duly approved or not. This provision would deprive the Builder/s from booking the flat/s, commercial premises, units etc. which is not sanctioned by the Statutory Authority and thus buyer/s would not be vulnerable to evil designs of the Builder/s to book such flat/s, commercial premises, units etc. for which no sanction is obtained.
3. The Builder/s must disclose the name of all project on website along with location and its status which the Builder/s has carried out in the last five years.
4. The Builder/s must disclose all the facts on website and details which are required to be disclosed in respect of the project to be carried out by him.
5. The Builder/s must sale only carpet area of flat/s, commercial premises, units etc., carpet area means an area between the wall and no other area should be considered. Only carpet area in sq.mtrs. to be written in the Agreement for sale to be executed with purchaser/s of flat/s, commercial premises, units etc.. The Builder/s must mention separately and specifically the carpet area of kitchen, living room, bed room and other premises attached to the flat/s and commercial premises, units etc.
6. The Builder/s cannot sale the flat/s, commercial premises, units etc. without obtaining Commencement Certificate from Statutory Authority for the construction of the building.
7. The Builder/s must disclose the period within which the Builder/s shall complete the project.
8. If the Builder/s fails to complete the building strictly within stipulated time then the Builder/s will have to pay penalty. However, if the flat/s, commercial premises, units etc. purchaser/s does not make payment within time as per the Agreement then buyers will have to pay penalty which would be same as penalty on Builder for not delivering the possession in time.
9. In the event if the Builder/s desire to change the layout then consent of 2/3rd allottee of flat is mandatory for changing the layout plan.
10. Builder/s can be imprisoned for violation while penalty includes project de-registration also.
11. Builder/s is liable for structural defect for five years.
12. Provision for insurance of land title. This provision caution the Builder/s from hiding any facts and legality in relation to title of the property.
13. The Builder/s will have to compulsorily deposit 70% of sale proceeds in Escrow Account in order to protect the buyers interest, in case Builder/s fail to carry out and complete construction work, then buyers shall come together and complete the project.
14. The Real Estate Agent will have to register with regulator. He would be liable to one year jail term if they don’t comply order of tribunal.
15. Separate Real Estate Authority shall be appointed and Real Estate Tribunal shall be constituted for adjudicating all the matters regarding any dispute between flat/s, commercial premises, units etc. purchasers and the Builder/s. State-level Real Estate Regulatory Authority will be established to regulate the transaction relating to both residential and commercial.
16. It appears that Bill is applicable for incoming project but all endeavour would be made to cover all the project. However, the said Bill is applicable to a property having more than 500 sq,mts. or more than eight apartments.
17. The Builder would be imprisoned maximum upto three years if they violate order of Appellate Tribunal. Appellate Tribunals will have to adjudicate cases in 60 days.
18. The Builder/s will have to put agreement with project detail, details of contractor, architect and structural engineer.
Contributed by CA.Madhav Bhatt