The Real Estate (Regulation and Development) Bill was introduced by the previous government to protect the interest of consumers, promote fair play in real estate transactions and ensure timely execution of projects. In April 2015, the current government had proposed certain changes that diluted some of the bill’s more stringent provisions. Based on the recommendations in a report of a select committee of the Rajya Sabha, further amendments were approved by the cabinet on 9 December for better protection of the rights of consumers as well as speedy and effective dispute resolution. The revised bill will be considered by the parliament. Key features and issues are outlined below.
Scope: The original bill sought to cover only residential projects. An amendment proposed in April 2015 extended the scope to commercial projects as well. Further, the bill covers both new projects and those in which sales are in progress.
Registration and disclosure requirements: Mandatory registration of real estate projects and real estate agents is one of the largest systemic changes that this bill seeks to bring. For registration promoters and real estate agents are required to disclose material information including details of the promoters, project, layout plan, development plan, land status, carpet area, number of apartments booked, status of statutory approvals, pro forma agreements, names and addresses of the real estate agents, contractors, architects, structural engineer, etc. Based on recommendations of the Rajya Sabha select committee, residential projects covering an area of even 500 (down from 1,000) square metres or eight apartments would need to be registered. Further, misrepresentation in advertisements issued by a promoter would entitle the buyer to compensation or refund of all amounts paid along with prescribed interest.
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Aakanksha Joshi is an associate partner and Tarini Menezes is an associate at Economic Laws Practice. This article is intended for informational purposes and does not constitute a legal opinion or advice.
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