The Bill will infuse professionalism and promote planned development of the real estate sector through the promotional role of the Regulatory Authority.
The proposed Bill applies to residential real estate i.e. housing and any other independent use ancillary to housing. However it shall not apply where the area of land proposed to be developed does not exceed 1000 square meters or the number of apartments proposed to be developed does not exceed 12, inclusive of all phases, or an area or number of apartments as notified by the Central Government on recommendations from the appropriate Government, which may be different for different States or Union territories but not more than 1000 square meters or 12 apartments.
The Bill will bring about standardization in the sector leading to healthy and orderly growth of the industry through introduction of definitions such as ‘apartment’, ‘common areas’, ‘carpet area’, ‘advertisement’, ‘real estate project’, ‘prospectus’ etc. Introduction of the concept of using only ‘carpet area’ for sale, which has till now been ambiguously sold as super area, super built up area etc., will curb unfair trade practices.
Establishment of one or more ‘Real Estate Regulatory Authority’ in each State/UT, or one Authority for two or more States/UT, by the Appropriate Government, with specified functions, powers, and responsibilities to exercise oversight of real estate transactions, to appoint adjudicating officers to settle disputes between parties, and to impose penalty and interest;
Mandatory registration of real estate projects and real estate agents who intend to sell any immovable property, with the Real Estate Regulatory Authority on real time basis without adding another layer of approvals.
Mandatory public disclosure norms for all registered projects, including details of the promoters, project, layout plan, plan of development works, land status, carpet area and number of the apartments booked, status of the statutory approvals and disclosure of proforma agreements, names and addresses of the real estate agents, contractors, architect, structural engineer etc.;
Duty of promoters towards disclosure of all relevant information and adherence to approved plans and project specifications, obligations regarding veracity of the advertisement for sale or prospectus, responsibility to rectify structural defects, and to refund moneys in cases of default;
Real estate agents not to facilitate the sale of immovable property which are not registered with the Authority required under the provisions of the Act, obligation to keep, maintain and preserve books of accounts, records and documents, obligation to not involve in any unfair trade practices, obligation to facilitate the possession of documents to allottees as entitled at the time of booking, and to comply with such other functions as specified by Rules made in that regard;
Right to obtain information relating to the property booked, to know stage-wise time schedule of project completion, claim possession of the apartment or plot or building as per promoter declaration, refund with interest in case of default by the promoter, and after possession entitled to necessary documents and plans. Duty of allottees to make necessary payments and carry out other responsibilities as per the agreement;
The Authority to act as the nodal agency to co-ordinate efforts regarding development of the real estate sector and render necessary advice to the appropriate Government to ensure the growth and promotion of a transparent, efficient and competitive real estate sector;
Establishment of fast track dispute resolution mechanisms for settlement of disputes, through adjudicating officers (an officer not below the rank of Joint Secretary to the State Government) to be appointed by the Authority, and establishment of an Appellate Tribunal to hear appeals from the orders of the Authority and the adjudicating officer;
Establishment of Central Advisory Council to advise the Central Government on matters concerning implementation of the Act, with a mandate to make recommendations on major questions of policy, protection of consumer interest and to foster growth and development of the real estate sector. The Council to have among others, five representatives of State Governments, to be selected by rotation;
Establishment of Real Estate Appellate Tribunal, by the State Government to hear appeals from the orders or decisions or directions of the Authority and the adjudicating officer. The Appellate Tribunal is to be headed by a sitting or retired Judge of the High Court with one judicial and one administrative/technical member;
Punitive provisions for non registration of a real estate housing project – Penalty which may extend up to 10% of the estimated cost of the real estate project as determined by the Authority .
For continued violation or non-compliance of order for registration – punishment with imprisonment for a term which may extend up to three years or with fine which may extend to a further 10% of the estimated cost of the real estate project, or with both as determined by the Authority .
For knowingly providing false information or willful contravention at the time of applying for registration and for other contraventions under the law – A penalty which may extend up to 5% of the estimated cost of the real estate project as determined by the Authority..