The most debated Real Estate Bill has finally become a law. Now the states will have to support the enactment by ratifying it.
The Real Estate Regulatory Bill will safeguard the rights of consumers against delays in completion of housing projects, industry body CII said and sought single-window and time-bound approval system for realty projects.
The Real Estate (Regulation and Development) Bill was passed by the Lok Sabha, after its passage by the Rajya Sabha. By March end it got the assent from the President and it became a law.
The law seeks to protect consumer interest, ensure efficiency in all property-related transactions, improve accountability of developers, boost transparency and attract more investments to the sector.
It provides for setting up of Real Estate Regulatory Authorities (RERAs), which will regulate transactions related to both residential and commercial projects and ensure their timely completion and handover.
The real estate sector is not only crucial from the economic perspective, having linkages with around 250 sectors, but also has deep socio-cultural importance in the Indian scenario.
CII hopes that all state governments would now soon come out with guidelines enabling time-bound approval procedures for housing projects with appropriate penalties for erring departments/ministries, said Chandrajit Banerjee, Director General CII.
"Not only would this step usher in a new era of transparency and accountability amongst all stakeholders, but will also help realise the government’s ambitious ‘Housing for All’ scheme by 2022," Banerjee said.
CII would continue to strive towards a single-window clearance regime for real estate and housing projects, he said.
The Bill provides for imprisonment of up to three years in case of promoters and up to one year in case of real estate agents and buyers for any violation of orders of Appellate Tribunals or monetary penalties or both.
Salient Features of the Real Estate Regulatory Act:
1)It establishes the State Real Estate Regulatory Authority for that particular state as the government body to be approached for redressal of grievances against any builder. This will happen once every state ratifies this Act and establishes a state authority on the lines set up in the law.
2)This law vests authority on the real estate regulator to govern both residential and commercial real estate transactions.
3)The law obliges the developer to park 70 per cent of the project funds in a dedicated bank account. This will ensure that developers are not able to invest in numerous new projects with the proceeds of the booking money for one project, thus delaying completion and handover to consumers.
4)The law makes it mandatory for developers to post all information on issues such as project plan, layout, government approvals, land title status, sub-contractors to the project, schedule for completion with the State Real Estate Regulatory Authority (RERA) and then in effect pass this information on to the consumers.
5)The current practice of selling on the basis of ambiguous super built-up area for a real estate project will come to a stop as this law makes it illegal. Carpet area has been clearly defined in the law.
6)Currently, if a project is delayed, then the developer does not suffer in any way. Now, the law ensures that any delay in project completion will make the developer liable to pay the same interest as the EMI being paid by the consumer to the bank back to the consumer.
7) The maximum jail term for a developer who violates the order of the appellate tribunal of the RERA is three years with or without a fine.
8)The buyer can contact the developer in writing within one year of taking possession to demand after sales service if any deficiency in the project is noticed.
9)The developer cannot make any changes to the plan that had been sold without the written consent of the buyer.
10)Lastly, every project measuring more than 500 square metres or more than eight apartments will have to be registered with the RERA.
Law to sell captive mines gets a nod
The Cabinet on in the last month cleared an amendment to the already enacted mining law to permit transfer of captive mines granted on discretion.
This Act shall be called the Mines and Minerals (Development and Regulation) (Amendment) Act, 2016. In the main act the following proviso shall be inserted, namely:
"Provided that where a mining lease has been granted otherwise than through auction and where mineral from such mining lease is being used for captive purpose, such mining lease will be permitted to be transferred subject to compliance with the terms and conditions as prescribed by the Central Government in this behalf."
Some major deals among cement companies, such as of UltraTech, Reliance Cements and Lafarge, are stuck because the Mines and Minerals (Development and Regulation) Act of last year allows transfer of mining leases only for auctioned ones. The government will be soon introducing the proposed amendment in Parliament.
Auction of non-coal mines was introduced in the new law. Earlier, all non-coal mines were given out by state governments, on discretion. "The amendment will benefit lessees desirous of transferring the captive leases not granted through auction. It will also benefit banks and financial institutions. It does not entail any recurring or non-recurring expenditure on the government," the later stated.
Aditya Birla Group’s UltraTech Cement is acquiring the 22.4 million tonne cement capacity of debt-ridden Jaiprakash Associates for Rs 17,000 crore.
The Anil Ambani-owned Reliance Infrastructure is selling its cement subsidiary to Birla Corp for Rs 4,800 crore. And, as a condition for its merger with Holcim, the Competition Commission of India had asked Lafarge to sell two units. The company was unable to sell its two units to Birla Corp because the mining rights could not be transferred. The amendment was proposed to "spur merger and acquisitions in the mining sector and help in checking the stressed and non-performing assets of banks, by allowing them to liquidate assets where a firm or its captive mining lease is mortgaged".
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