Real Estate Regulatory Bill gives more power to buyers to take on errant builders

The much-awaited Real Estate Regulatory Bill has now broken the last hurdle to become a concrete legislation when it was passed by the Upper House of the Parliament – Rajya Sabha on Thursday much to the relief of home buyers who now got a legal arm to protect their interests.

The Bill has various provisions which can protect the interest of buyers, who have remained mute victims for years due to irregularities in the real estate dealings by unscrupulous builders across the nation. The provisions of the bill now will make the developers accountable and also bring in the much-needed transparency in terms of dealings and quality of the products.

Indian real estate has so far been remained unregulated which has made many becoming fly-by-night builders to take advantage of the gullible home buyers. Big builders are now happy because this bill will regulate the industry and cut-to-size the small-time developers who account for more than 60 per cent of realty transactions in India.

However, certain developers did express their disappointment saying that the Bill did not take Government agencies, whose delay in approvals can impact on project completion schedule, from its purview. It’s now up the state governments to implement it with or without further amendments.

Let’s see what builders, analysts and industry organizations have to say about the Bill becoming a Law.

T Chitty Babu, National Chairman of CREDAI:

T Chitty Babu, while welcoming the Bill, said, “This will give a level playing field for developers and also regulate the approval process.” However, he said that the Bill has failed to bring an important stakeholder into its fold — the government agencies.

Explaining further, he told New Indian Express, There are four stake holders in the development of a real estate project - the developer, the financial institutions and the customer. The fourth stake holder, the government, has not been brought into the ambit of the bill. The government plays an important role in the approval process. Now we will have 58 windows and a door.”

Sunil Kanoria, president, ASSOCHAM:

Apex industry body ASSOCHAM said the Bill would to lead development of urban infrastructure,  help realise government’s vision of ‘Housing for every Indian by 2022’ and play a pivotal role in structural transformation of India’s economy.

“Apart from resolving key issues that are hampering the growth of the real estate sector, this bill will lead to institutional reforms in land acquisition, approval processes and taxation that are much needed to expedite development of affordable housing,” said Sunil Kanoria, president of The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

“Besides, it will also help in facilitating investments through FDI, REITs and other innovative real estate financing models will help attract long term funds from foreign and domestic investors,” Kanoria said.

Arvind Jain, Managing Director - Pride Group: 

The real estate regulatory bill has been long in the pipeline, and has now cleared all roadblocks and become a law. Various decision makers involved in it had been ambiguous about their stance towards this vital regulator, and as a result it remained pending. Now, it has finally received the green signal and is all set to revolutionize the Indian realty market. It will empower consumers by giving them confidence while making their real estate investments. It imposes strict regulations on how developers conduct their business, and underwent various redrafts aimed at doing this. It is very encouraging that the bill is now a reality. 

Kishor Pate, CMD - Amit Enterprises Housing Ltd: 

The real estate needed the Real Estate Regulatory bill more than any other single piece of legislation, even though GST, the Land Aquisition & Rehabilitation Bill, single window clearance and industry status are by now means of less importance.  The industry has been in express need of an apex body through which all concerns of consumers can be addressed transparently and efficiently. We will now see a radical transformation of the entire residential sector. Strict enforcement of project delivery timelines, verifiable construction quality and assurance of legal clearances will finally become a reality, and the consumer confidence which had all but evaporated will return. It is a most welcome development.

Anil Pharande, Chairman - Pharande Spaces: 

The Indian real estate sector has historically been unregulated and ill-organized. Unfortunately, the unorganized segment has so far represented the largest share of the market, and it is in this segment that consumers have in innumerable cases been held hostage to by unscrupulous practices of ruthless developers. The real estate regulatory bill was drafted with a vision to give clarity and assurance to real estate buyers via various strictures. Now that it has become an enforceable law, it will have a profoundly positive effect on how both domestic and global investors view Indian real estate. More importantly, it will give homebuyers a strong measure of assurance. 

 

Anuj Puri, Chairman & Country Head, JLL India:

The passing of the long-pending Real Estate Regulatory Bill is an unequivocal victory for the Indian real estate sector. Its enactment as a law will almost single-handedly revamp the way the sector works across the board, from developers to end-users and investors, to lending institutions and government agencies involved in the buying and selling of property. It is by far the most decisive step the sector has taken towards transparency and reaching towards the kind of standardized processes, procedures and accountability guidelines that the industry requires to progress.

Harshvardhan Neotia, President, FICCI:

Commenting on the Real Estate Regulatory Bill, Harshvardhan Neotia, President of FICCI, said, “The passing of Real Estate Bill, 2016 in Rajya Sabha is a landmark step towards enhancing the credibility of construction industry by bringing in transparency and accountability in execution of projects. I hope this bill will put in place an effective regulatory mechanism that would safeguard the interest of consumers as well as provide protection against fly by night operators. The passing of bill should enable timely approval and execution of projects which will raise the confidence of consumers and also give a huge boost to the growth of real estate sector.”

Though this is a good beginning after a prolonged delay, the Real Estate Regulation and Development Bill becoming a Law, in a way would prompt buyers to go for purchasing homes without any apprehension of being cheated. This will help the sagging real estate sector to stand up to meet the increase in demand. Though there are still uncertainities like the appointment of regulators   in states and implementation in toto by state governments, the bill in the long term would provide the much-needed impetus to the sector's overall growth.

Also read the article in Press Release Point.