It's been a few years in the making and after a lot of going back and forth, India's first regulation to monitor real estate developers may be more of a whimper than a bang.
Well, the real estate sector is all set to get a regulator soon. After four years of deliberations and strong lobbying by realty players on the final provisions of the Bill, NDTV learns that the Bill is finally ready to be placed in the Cabinet.
However, several strict provisions that were initially planned have been dropped from the Bill. There is no mention of heavy penalties and jail term for erring builders, no provisions to enforce distinction on pricing between built up and carpet area and licenses will be issued by the state instead of the regulator.
HDFC was the first one to suggest measures to bring in transparency in pricing.
Keki Mistry, MD of HDFC, "Prices have to be on the basis of carpet area and not built up area. This is very important for the sake of transparency."
But despite dilution of certain important provisions, the Bill is seen as an important step in regulating the industry. The urban development ministry has garnered enough support from the developer community to finally push the Bill.
However, there remain some provisions in the new Bill to hem in real estate developers.
Under the Bill, realty players will need license to operate. Besides, pre-launch sale of property will not be allowed and property buyers can seek refund if builders fail to comply.
Also, the government will have power to cancel the license of a property developer on violations and also the insurance of the property will be mandatory on part of the realtor.
Meanwhile, it’s still left to be seen how far the law could be implemented, if at all it gets Cabinet approval as land is a state subject and would need active participation from the states.
S: NP
Well, the real estate sector is all set to get a regulator soon. After four years of deliberations and strong lobbying by realty players on the final provisions of the Bill, NDTV learns that the Bill is finally ready to be placed in the Cabinet.
However, several strict provisions that were initially planned have been dropped from the Bill. There is no mention of heavy penalties and jail term for erring builders, no provisions to enforce distinction on pricing between built up and carpet area and licenses will be issued by the state instead of the regulator.
HDFC was the first one to suggest measures to bring in transparency in pricing.
Keki Mistry, MD of HDFC, "Prices have to be on the basis of carpet area and not built up area. This is very important for the sake of transparency."
But despite dilution of certain important provisions, the Bill is seen as an important step in regulating the industry. The urban development ministry has garnered enough support from the developer community to finally push the Bill.
However, there remain some provisions in the new Bill to hem in real estate developers.
Under the Bill, realty players will need license to operate. Besides, pre-launch sale of property will not be allowed and property buyers can seek refund if builders fail to comply.
Also, the government will have power to cancel the license of a property developer on violations and also the insurance of the property will be mandatory on part of the realtor.
Meanwhile, it’s still left to be seen how far the law could be implemented, if at all it gets Cabinet approval as land is a state subject and would need active participation from the states.
S: NP
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