New bill seeks to protect home buyers, curb graft in realty

November 11th, 2011 - 8:55 pm ICT by IANS  

New Delhi, Nov 11 (IANS) The government Friday released a draft bill that seeks to bring transparency and accountability in real estate and housing transactions and curb widespread corruption in the sector.

The Real Estate (Regulation and Development) Bill, 2011, is likely to be tabled in the parliament in the winter session, Housing and Urban Poverty Alleviation Minister Selja told reporters here after releasing the draft bill for public and stakeholders’ comments.

“We will try to bring it in winter session,” Selja said, adding that the ministry would move for cabinet clearance in the next few weeks.

The winter session of parliament begins Nov 22 and ends Dec 21. Selja said the union cabinet was likely to clear the bill in the next few weeks.

“The bill is expected to ensure greater accountability towards consumers, bring transparency and fairness in transactions and reduce frauds and delays significantly,” the minister said.

Real estate and housing sector in India is largely unregulated and has emerged as a source of black money and corruptions.

Because of the opaque and outdated regulations, consumers generally suffer as they are not able to enforce accountability against the builders.

Selja said the proposed regulation would protect the interests of consumers without hurting the real estate industry growth.

The bill is also expected to promote regulated and orderly growth through efficiency, professionalism and standardisation, according to draft of the proposed bill. “It seeks to ensure consumer protection, without adding another stage in the procedure for sanctions.”

As per the proposed regulation it will be mandatory for all developers and builders, who intend to sell any immovable property, to register with Real Estate Regulatory Authority.

The government proposes to set up a Real Estate Regulatory Authority in each state and union territories. In the union territories like Delhi, the authority will be regulated by the central government while state governments will regulate the authority in their respective states.

The proposed regulation also seeks to balance the authority of central and state governments in regulation of housing and real estate sector.

According to the draft bill, both central and state governments will have powers to make rules over subjects specified in the bill.

The minister said the real estate sector in the country was a key driver of economic growth contributing 9.3 percent to GDP.

“In recent years, housing and real estate sector has seen unprecedented growth. On the one hand we are creating housing stock, on the other, urban areas specially vulnerable areas are under stress due to growing urbanisation,” she said, adding that there has been some kind of “urban chaos”.

The urban areas occupy only 3 percent of land mass of the country she said, adding that 31. 16 percent of country’s population lives in urban areas which is going to go upto 40 percent by 2030.

“This kind of growth has not taken place earlier. It is set to increase in the coming years,” she said.

The minister who has been dealing with housing sector in different capacities since 2004 said there have been some “opaque and unfair practices”.

She said the ministry had been planning a model real estate bill but somewhere down the line realised will not have much impact.

She said there was rethinking and the ministry consulted law ministry. She said the central legislation will not touch the areas in the domain of state governments.

Selja said the ministry will be happy to have inputs on the bill, which has been uploaded on its website.

Answering queries, Selja said the bill deals with transaction issues when consumer-developer relationship comes in. She said the provisions of the bill will be applicable after formal building process begins and there was no conflict with Acts of state land development authorities.

She said the suggestions that such a bill was needed had also come from people working in housing sector.

She said the bill seeks to protect consumers as there have been “unscrupulous fly-by-night operators,” but added that the ministry does not “wish to put impediments in the growth of real estate sector.”

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