News for Real Estate Regulation Bill

[umesh.prabhakar1965@rediffmail.com]

The Real Estate(Regulation and Development) Bill is supposed to be tabled in Parliament during Budget Session as per the news of TOI dt 17.01.2013 on Page 11 Read as:

Centre goes flat out to protect buyers in new bill. Mahendra Kumar Singh TNN

New Delhi: Builders will sell residential property on the basis of carpet area instead of ambiguous terms like super built-up area and a regulator will ensure housing projects declare the status of important civic clearances these are the provisions in a new law aimed at giving home buyers a better deal.
The Real Estate (Regulation and Development) Bill,which the government plans to bring to Parliament in the Budget session,has been framed under provisions dealing with property transactions in the concurrent list of the Constitution that applies to states,making the proposed legislation more than a model law.
In a bid to try and make sure developers stick to timelines, the proposed law states that realty players will have to park 70% of funds in a particular bank account so that resources are not diverted and buyers are not left in the lurch.
A real estate regulator in every state will make it mandatory for private developers to register all projects before sale of property and only after getting all necessary clearances, addressing a major concern of buyers about incomplete or fraudulent land acquisition.
According to the bills provisions, failure to declare status of clearances will invite up to a maximum three years imprisonment or fine that can amount to 10% of project cost.
Realty players will have to disclose project details and contractual obligations to ensure transparent, fair and ethical business practices. There can be a model agreement which is expected to reduce ambiguities in real estate transactions that not many buyers are familiar with.
Private builders are not comfortable with some of the bills provisions and have voiced their objections at a meeting chaired by housing minister Ajay Maken and urban development minister Kamal Nath.Those who attended the deliberations included representatives of developers associations CREDAI,NAREDCO and industry chambers CII and Ficci.
Builders maintain that there is no need for a regulator as they are already subjected to clearances from multiple agencies. They feels the penal provisions hurt their interests, but the government might want to increase the odds in favour of consumers.
The meeting was called after the intervention of the Prime Minister’s Office, which asked the two ministries to resolve differences and quickly finalize the long pending bill. The government hopes the move for a strong legislative protection for buyers will help in gaining the appreciation of middle class voters who have drifted from the Congress.
Although realty developers have been asked to submit their views at the earliest, the government seems determined not to dilute the consumer-friendly provisions. We are not going to compromise on any aspect of the bill that hurts the interest of common home buyers, Maken said. Real estate agents will also be asked to register with the regulator.


The bill states that realty players will have to park 70% of funds in a particular bank account so that resources are not diverted and buyers are not left in the lurch

[nefowa]

Support needed for Real Estate Regulator Bill. Please Join Us.
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“Home, the spot of earth supremely blest,

A dearer, sweeter spot than all the rest”.
English poet, Robert Montgomery, expressed a serene fondness for his home in the 1800’s and this same sentiment is still shared by millions of homeowners and most importantly by the new dreamers for many generations.Our homes are truly “a dearer, sweeter spot than all the rest.” They are a heaven from life’s turmoil and demands, a resting place and our safe harbor. However, for many, the dream of owning a home has been shattered at the hands of so called reputed builders who, happen to be self acclaimed powerful lobby. Most of the times they refuse to listen and care about the concerns of their own buyers; they follow and keep doing what they think right that too with force. In that case, the buyers feel helpless, even scared to take any action against them. therefore, it is made out that they are not there to help fulfill the dreams of the buyers but to help fulfill their own i.e. making immense profits at the cost of anything and everything. So long as their concern does not involve the woes of the buyers, everything appears normal. But the moment the buyers find themselves trapped, a never ending saga of grief and despair starts.

In past times, the projects of Greater Noida West and other NCR regions have turned up to be the above narrated story. Almost all the builders have indulged in grabbing the hard earned money (khoon pasine ki kamai) of thousands of buyers on this or that count.What adds more to the woes of the buyers is the fact that there is no authority which can be approached in such cases. therefore, no one is to listen and understand the genuine problems of the buyers.NEFOWA has been running from pillar to post to help protect he concerns of thousands of buyers of Greater Noida West and has been raising the issues by reporting to Govt. officials, political leaders etc. Everybody so reported, however, has just to console the buyers. No one has to come concrete. there is no Act, no Regulation to curb the frivolous callous attitude of the builders or at least to make them accountable towards the issues and concerns of buyers.

A delegation of NEFOWA met Mr.Ajay Maken,Minister of Housing and Poverty Alleviation, Govt. of India in December 2012 and pressed for its demand of getting the much promised and awaited Regulatory Bill in this regard passed in Parliament in this winter session itself but to no avail despite assurances.
NEFOWA, however, would not fear and sit quite, rather it will fight for the causes of innocent buyers who are always hopeful of an amicable solution having their own concerns involved.

In its continuous fight of rights NEFOWA is organizing a protest "Dharna" at Jantar-Mantar on 24th February (Sunday) from 10 AM. NEFOWA requests all home buyers and those who dream for own home, join this protest with family.

We also request all buyers group of NCR to join this event and give strength to home buyer's voice.

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Here we go with the DRAFT BILL. Please read and suggest

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Anshul Dhamija, TNN | Jun 8, 2013, 09.37AM IST

BANGALORE: With the Union Cabinet approving the Real Estate (Regulation and Development) Bill, the country's highly unregulated and unorganized real estate sector moves a step closer towards greater transparency and compliance.

The Bill, which looks at just the residential market, seeks to create a central regulatory authority and various state levels authorities for the real estate market in a bid to protect buyer interests by providing a uniform regulatory framework.

The Bill seeks to prevent developers from putting out misleading advertisements; ensure that they don't market projects unless necessary approvals are in place; and direct developers to declare a time frame for developing projects. The Bill also seeks to impose monetary penalties on the developer for project delays, with repeat offences liable for a jail term.

Developers are also required to keep 70% of the monies realized from sales in to an escrow account towards construction costs, which cannot be diverted to other use. Often it is found that money received for one project is used for other projects, thus delaying the first project. "While the Bill may not impact the large developers, it will definitely raise the 'fiduciary disciplinary' bar for the small and mid-level developers catering to 30% of India's housing sector demand," said Shrinivas Rao, CEO-Asia Pacific of Vestian, a global consultancy company.

The Bill defines the sale of property by 'carpet area' and not 'super-built up area' or any other terminology. The carpet area is normally defined as the actual net usable floor area of a residential unit. Super built-up area is the built-up area (carpet area and wall breadth) in addition to the proportionate area of common areas, such as the lobby, lift shaft, stairs, club, etc.

Rao explains, "Say you are buying a 3-BHK unit with a super built up area of 1,500 sqft. The developer gives you the plans with all the dimensions, but in most cases the buyer is clueless about the carpet area or actual usable area. "Hence, with this safeguard, buyers would get to know upfront what amount of livable space they are buying."

However, RICS, a leading professional body for qualifications and standards in land, property and construction, said that the concern is of the actual definition and measurement standards for 'carpet area', which still haven't been clearly defined. Since the definition mentioned in policies and laws tend to be subjective, carpet area is interpreted and calculated differently.

"This problem is not unique to India as it exists in many parts of the world," said RICS.

The Bill is to be tabled in the monsoon session of Parliament. But developers are already upping the chorus for a simultaneous Bill on project approvals.

"The fear is that the Real Estate Bill will add another layer of bureaucracy in an industry which is heavily burdened by multiple approvals from different agencies which increases the project completion cycle and adds to project costs," said Suraj Asrani, COO, Cornerstone Properties.

Across the country developers experience inordinate delays and difficulty in obtaining project approvals from multi-headed government agencies. These delays range from 8 months to 18 months on an average. "These issues do not find any resolution in the Bill," said Asrani.

Asit Koticha, chief investor at Pashmina Developers, said that the government should simultaneously look at setting up a single-window clearance system to streamline the approval process. "This would ensure timely delivery without project cost escalations and help in strengthening the customerdeveloper relationship," said Koticha.

Pro-buyer bill

The Bill seeks to prevent developers from putting out misleading advertisements; ensure that they don't market projects unless necessary approvals are in place; and direct developers to declare a time frame for developing projects

The Bill defines the sale of property by 'carpet area' and not 'super-built up area' or any other terminology

The Bill is to be tabled in the monsoon session of Parliament

http://timesofindia.indiatimes.com/busi ... 488898.cms

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MUMBAI: The real estate regulatory bill, when enacted, is expected to boost demand for residential property, rating agency Crisil said today.

The Real Estate (Regulation and Development) Bill, approved by the Union Cabinet on Tuesday, provides for setting up a regulator for the sector and has provisions like jail term of up to three years for developers for offences like releasing misleading advertisements.

"The Bill will incorporate mandatory disclosure clauses, which would provide greater clarity on the project standards and timelines for completion. For developers, while this bill implies stricter regulatory control, it will also translate into better demand, as buyer confidence improves," Crisil said in a statement.

Delays in hand-over of projects are likely to decline as clauses mentioned in the Bill mandate strong commitment from developers to complete projects as per schedule, it said.

The Bill mandates that 70 per cent or such lesser percentage, as notified by the appropriate state government of the money raised for a project should be deposited in a separate account.

Crisil said: "By ensuring that developers do not divert funds meant for a particular project to other projects, the Bill seeks to curb delays in project completion due to shortage of funds.

"The Bill also protects buyers against project delays by requiring that developers refund the amount paid along with interest in the event of a delay. Both these factors are expected to ensure timely completion and hand-over of projects to the buyers."

http://economictimes.indiatimes.com/mar ... 477059.cms

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Real Estate Regulatory Bill may become breeding ground of corruption: CREDAI

Stating that the Real Estate Regulatory Bill approved by the Union Cabinet seeks to whip only errant developers, realtors apex body CREDAI Chairman Lalit Kumar Jain has expressed fear that it could encourage corruption instead of curtailing the social menace.

Mr Jain expressed his views on the subject based on the press release from the Union Cabinet and added that he would provide detailed observation after receiving the draft legislation.

Mr Jain, who is also the Chairman and Managing Director of Mumbai-Pune developer Kumar Urban Development Limited (KUL), said the real estate sector definitely needs a regulator on the lines of the one controlling telecom, banking, stock markets and insurance sectors.

He lauded the intent of the Housing Minister but said that the discretionary powers for registering or deregistering projects and adjudication by a bureaucrat could become breeding grounds for corruption. Moreover, the provision for criminal prosecution of developers could lead to the exit of professional and qualified developers.

"Our fear is that those with expertise to handle political influencers will only survive, thus leaving the all important industry in the hands of corrupt people," Mr. Jain said and called for regulator covering all stakeholders like defaulting customers, the approving authorities and financial institutions that fund projects.

"How can anyone blame the developer if a project is held up due to approval delays or funds for that matter?" he asked.

"CREDAI has worked hard to advise the ministry to come out with appropriate comprehensive Bill with teeth to direct all stakeholders including approving authorities which will protect consumers while enhancing quality environment for the business," he pointed out. Otherwise it will be an added establishment with huge costs, serving no purpose other than adding cost, thereby making tenements costlier.