The Rajya Sabha on Thursday approved the Real Estate (Regulation and Development) Bill, 2016, moving a step closer to the establishment of a regulator that seeks to protect the interests of home buyers.

The Bill, which seeks to put in place an effective regulatory mechanism for the sector, will also enhance the credibility of construction industry by promoting transparency, accountability and efficiency in execution of projects, a statement from the Ministry of Housing & Urban Poverty Alleviation said.

The Bill requires that developers deposit 70 per cent of funds collected from buyers in a separate accounts towards the cost of construction including that of land as against a minimum of 50 per cent suggested by the Select Committee.

Commercial real estate has also been brought under the ambit of the Bill and projects under construction are also required to be registered with the Regulatory Authority.

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The Bill requires project promoters to register their projects with the Regulatory Authorities disclosing project information including details of promoter, project including schedule of implementation, layout plan, land status, status of approvals, agreements along with details of real estate agents, among others.

“The norms for registration of projects has been brought down to plot area of 500 sq. m or 8 apartments as against 4,000 sq. m proposed in the draft Bill in 2013 and 1,000 sq. m or 12 apartments suggested by the Standing Committee,” the statement said.

As far as delay in delivery is concerned, both consumers and developers will now have to pay the same interest rate for any delays on their part. Moreover, the liability of developers for structural defects has been increased from 2 to 5 years and they can’t change plans without the consent of two thirds of allottees.

A provision has also been made for imprisonment of up to 3 years for developers and up to one year in case of real estate agents and consumers for any violation of Tribunals and Regulatory Authorities.

Timeline: Real Estate Bill

(Source: Ministry of Housing & Urban Poverty Alleviation)

-Ministry of Law & Justice suggested a Central Law for regulation of real estate sector in July, 2011;

-Union Cabinet approved the Real Estate Bill, 2013 on June 4, 2013;

-Bill was introduced in Rajya Sabha on August 14, 2013;

-Bill was referred to the Department Related Standing Committee on September 23, 2013;

-Report of the Standing Committee was tabled in Rajya Sabha on February 13 and in Lok Sabha on February 17, 2014;

-Attorney General upheld validity of central legislation for real estate sector on February 9, 2015;

-Union Cabinet approved Official Amendments based on the recommendations of the Standing Committee on April 7, 2015;

-Bill of 2013 and Official Amendments referred to the Select Committee of Rajya Sabha on May 6, 2015;

-Select Committee tables its report along with the Bill of 2015 on July 30, 2015;

-Real Estate Bill, 2015 was approved by the Union Cabinet on December 9, 2015;

-Bill,2015 was listed for consideration and passing in Rajya Sabha on 22nd and 23rd December, 2015 but could not be taken up;

-The Real Estate (Regulation & Development) Bill, 2016 passed by Rajya Sabha on March 10, 2016.

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