Real Estate Regulation Bill: Boon for the buyers

Published: September 11, 2009

Perfidious builders can no longer conceal the real floor area of apartments they are selling to the buyers by juggling them between carpet area and super area. Government is working on a new Real Estate Regulation Bill that will set guidelines for builders and real estate developers. Mulling suitable amendments to the existing Rental Control Act, the new bill is supposed to provide affordable housing to the Urban Middle Class by reviving the rental housing.

Kumari Selja, Minister of Housing and Urban Poverty Alleviation announced that the Real Estate Regulation Bill has already been delayed and may be passed in the winter session of the parliament. It will surely make the real estate sector healthy, transparent, efficient and competitive.

Delivering the inaugural address at the National Conference on Affordable Housing for Urban Poor organized by ASSOCHAM, Selja said the government was seriously looking at revival of rental housing system and accordingly making necessary changes in the Rental Control Act for the purpose.

The government is likely to introduce a system for rating builders and developers. The rating would be based upon the developer’s management team, financial strength, scale of operations and past performance. If at all, the performance falls below a benchmark value, the registration might be revoked. The rating system would ensure the development of a sense of business ethics amongst the developers. The rating of a project or developer builds confidence by ensuring that a reasonable quality product is delivered in a specified time and within the specified price range.

Generating a level of transparency in the sector will provide stringent safeguard measures against the big promises made by the builders that are not honored. It is mandatory for the builder to specify the area of an apartment in the sale deed. Separate calculation of charges levied for the common spaces such as corridors, parking and lifts, etc. has to be made.

This initiative of the Government will sought more discipline and ethics in the business. The legislation which will honor the buyers’ rights by not allowing developers to charge for the super built-up area, which in a way will help the common people get the real value for their money. It will help the buyers who are promised the moon by the builders and charged extra in the name of providing many facilities. However, it is also necessary for the buyer to be aware of their property rights and make proper enquiries before transactions. The terms floor area and carpet are should not be confused by the buyers. They should be aware of the common facilities that are free and which have limited access.

(The government links for the Bill shall be provided once it is passed)

Posted under categories: Laws & Regulations
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1 Comment so far

  1. Mahesh Gupta March 14, 2010 9:37 pm

    I have booked a 3 BHK flat with Omaxe Ltd. Though the Banks are not offering loan on the project, I have already paid more or less 55% cost of flat. The builder is still asking another 5 to 10%. Please advise if any rules on the subject.

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