Lok Sabha yesterday approved the Real Estate (Regulation and Development) Bill, 2016. The bill seeks to create a set of rights and obligations for both the consumers and developers and encourage both of them to live up to the expectations of each other as per the agreement entered into by both of them.
Moving the Bill pending in Lok Sabha after it got passed in Rajya Sabha on March 6, Minister of Housing & Urban Poverty Alleviation Shri M. Venkaiah Naidu clarified the position on the issues such as how the Bill will be applicable to existing projects; the Rules on setting aside 70% of customer advances in an escrow account; compulsory approvals prior to project launches, and payment of similar interest rate to customers as charged from them for delays will impact launches and increase compliance costs. The clarifications by the Minister on different issues are as below:
Requirement to deposit 70% of collections:
Ensuring timely approvals for housing projects
The act also provides under clause 32(b) for the Real Estate Regulatory Authority to take up with appropriate government of competent authority, the creation of a single window system for ensuring time bound project approvals and clearances for timely completion of projects.
Shri Naidu has said that with a target is to ensure that all required approvals are given in about a month’s time, he held 7 high level meetings with the Ministers of Environment, Forests and Climate Change, Civil Aviation, Defence, Consumer Affairs, and Culture for streamlining such approvals. All these ministries as a result have taken significant measures to ensure online and timely approvals. Single window approval system is being developed to standardize and settle timelines for approvals and use of IT & GIS for automation of such systems, setting up nodal agency & empowered committees, Shri Naidu added.
The Minister assured the industry that with the establishment of a regulatory mechanism there would be greater flow of investment, both national and foreign, into the sector, resulting in reduction in cost of borrowing.
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, lay out plan, land status, status of approvals, agreements along with details of real estate agents, contractors, architects, structural engineers etc. Shri Naidu said that this enables transparent, accountable and timely execution of projects.
The Minister further said that the Real Estate Bill, 2016 enables the people meet their genuine aspirations of owning a house including those of urban poor by giving a fillip to affordable housing initiative under which the Government intends to enable construction of 2 crore by the year 2022 under Prime Minister’s Awas Yojana (Urban).
Shri Naidu has said that the Real Estate Bill is a gift to the nation by the Prime Minister. The passage of the bill is an example of Prime Minister’s commitment to total transformation, added the Minister.