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Discussions related to Real Estate matters, Real Estate laws, loans, financial queries

Advantage Builders in revamped Real Estate bill

Postby dheerajjain » Sat May 02, 2015 12:02 pm ... 42730.aspx

Builders appear to have got a better bargain than customers in the revamped Real Estate (Development and Regulation) Bill introduced by the NDA government in the Rajya Sabha on Wednesday.

The previous UPA government had drafted the bill two years ago for a law to primarily regulate the country’s booming housing business rife with complaints from buyers.

Unhappy with the changes made to the 2013 bill, the Opposition now accused the BJP-led government of being “pro-builder”, adding to its anti-farmer barb over the proposed land acquisition law that will make it easier for industry to buy farmland. It said bill’s redraft should be sent to a parliamentary select committee for review.

The government clarified that the bill protects interests of buyers without throttling the real estate sector. “It is a fine act of balance between the two,” a Union minister said.

The draft, however, reveals builders will enjoy more concessions than buyers. It allows builders to deposit only 50% of the money collected from prospective buyers in an escrow account as against 70% in the UPA-era bill introduced in the Upper House of Parliament in 2013.

Opposition parties alleged that the change would delay projects because builders might misuse buyers’ hard-earned money or spend in projects other than the one the cash was meant for.

But Manoj Gaur, president of the Confederation of Real Estate Developers of India’s NCR wing, welcomed the change, which he said would boost the sector’s health.

The government had also provided an escape route to builders if they fail to deliver flats or apartments within the promised deadline — the number one complaint of buyers.

Builders cannot be held liable for any delay if authorising agencies fail to give statutory clearances on time, such as completion certificate and other approvals. In such cases, the bill says builders can seek extension.

Ashish Kaul, an RTI activist and Gurgaon-based home buyer, said the change would open more avenues for builders to cheat buyers on flimsy grounds.

Besides, a key change in section 14 of the proposed law could lead to a buyer not getting what was promised to him. The bill of 2013 prohibited any alteration in structural plan offered to the buyer.

The new bill allows alterations, but it should be authorised by an architect or engineer and the buyer has to be informed about it. Kaul alleged that buyers could now get flats different from the original design, with a spiked price for a bigger “super-area”.

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