Buying a home is the most expensive decision any middle class family will ever take; but due to various factors, real estate is the most unorganized, shady and risky sector in the country. Most of the money which is being circulated is black, with no accountability of the builder, promoter or the marketer.
10 lakh Indians buy house in a year; and in the absence of any regulatory framework, it was becoming difficult to encourage more buyers.
But thankfully, the bull has been tamed now as Rajya Sabha passed an extremely crucial bill which will regulate real estate sector in India, and protect home buyers from potential cheats and frauds which are rampant in this niche.
The importance of this bill can be gauged from the fact that during the budget session of Parliament earlier this month, hundreds of home buyers launched campaigns targeting Rahul Gandhi, Venkaiah Naidu (Housing and Infrastructure Minister), PM Modi and other important dignitaries to passing this bill.
After the bill was passed, PM Modi tweeted: “Passage of Real Estate Bill is great news for aspiring house buyers. It will transform the real estate sector,”
Here we present 7 reasons due to which every home buyer (or potential home buyer) is right now rejoicing:
– Prices of real estate would now stabilize as inflow of unaccounted money will stop; more housing units would be built and more customers would be now interested to invest in real estate.
– Earlier, in case any customer had any legal dispute, then he was stuck between promoter, developer and the seller. But not anymore, as a proper customer protection framework has been implemented. A real estate regulator would be formed, which will handle all such cases.
– In case any real estate project is more than 500 square meter or 8 apartments big, then they will have to register with the regulator for approval. And this means, every customer would be now protected by law.
– The developer will have to put 70% of the money received from customers for a new project to a separate ‘escrow’ account, so that the funds are not diverted to start a new project. This is a huge step to ensure that the construction is completed within the speculated time
– The Bill provides for arranging Insurance of Land title, currently not available in the market which benefits both the consumers and developers if land titles are later found to be defective
– Developer or promoter cannot change the layout/design of the construction, especially after receiving the money. Carpet area will have to include usage spaces such as kitchen area, lobby etc, which means that the buyer will no longer pay extra and get less.
– Provision of heavy fine and/or imprisonment designated for promoters, developers and salesmen in case any complaint is proved in the Tribunal
Besides, the bill also covers provision for heavy fine, if the advertisement defies reality and the customer feels cheated. Anti-discrimination policy is also highly laudable, as promoters and developers cannot discriminate against buyers from any religion, caste or region.
Do you think this approval of the Real Estate Bill can transform the industry in India? Do share your views by commenting right here!