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BW Businessworld

Real Estate Bill: For Home Buyers Or For Votes?

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Home buyers will welcome the Union Cabinet’s approval for the Real Estate Bill. It has been in the works for over two years now. The sudden rush to make it a law seems to be — like the Food Security Bill — necessitated by the looming elections and the ruling party’s bid to please the harassed masses. It is yet to be seen whether the government means business as a Cabinet nod will not automatically transform the bill into legislation. There is a long queue in Parliament of pending bills; and there is no guarantee the Real estate Bill too will continue to languish – a victim of party politics – like so much other well-intentioned legislation. If the government wants to put its money where its mouth is, it should promulgate the Bill as law through an ordinance.

The main thrust of the government’s move is to bring in transparency and prevent customers being cheated of their life savings. Among the measures proposed is the creation of a Real Estate Regulator for the housing sector, and mandatory registration of projects before builders can launch sales. Builders will also be required to disclose all project details including clearances obtained, number of flats available and sold, site maps, etc. Most important, all residential sales will have to be based on carpet area of the apartment/home. Hopefully this will end the current malpractices based on ubiquitous terms such as ‘built-up ‘ and ‘super-built-up’ area.

Read AlsoReal Estate Bill: What It Means For The Home Owner

This slew of measures will ensure not only projects are completed on time, but also specifications of flats and facilities offered at the time of sale are adhered to. The setting up of the Regulatory Authority and an Appellate Tribunal is aimed at setting up a dedicated forum for hearing and resolving the plethora of property disputes speedily and to hopefully ease the existing courts of the mountains of property litigation they handle.

Developers expectedly are not happy. Anuj Puri, chairman of broking group Jones Lang LaSalle India, says: “The Bill in its current form does not provide for any relief to developers in obtaining approvals for construction from the multi-headed Government agencies. They have stressed on the need for a single-window clearance to cut through the red tape. This issue does not find any mention in the Bill.”

Sunjay Dutt, Executive Managing Director of property brokers Cushman & Wakefield, while welcoming the realty bill as “a watershed development,” however, warns that the cumbersome permissions required once the bill is implemented will slow down new launches. “Hence, the Bill may create an upward pressure on prices as there will also be some cost implications as developers wait to launch their projects with due approvals in place,” says Dutt.