India’s long awaited Real Estate Regulation Bill has been hit by a series of delays, with latest reports stating that isn’t due to be tabled during the current session in Parliament. Originally, the bill was due to be introduced during the Budget session.
Apparently the final draft of the bill is now ready, and the housing ministry is hoping it will be heard during the monsoon session. Changes made to the final draft include clauses on compulsory registration and imprisonment.
In the final draft, imprisonment will only be applicable in cases of non-registration with the regulatory authority, as it is mandatory for certain types of projects, and for certain sizes of projects. The maximum prison sentence is three years, and penalties totaling up to 10% of the total cost of the project can be applied.
Other changes to the final draft include a reduction in the size of the area for compulsory registration from 4,000 square feet to just 1,000 square feet, meaning smaller developers are now included in this scheme.
The National Real Estate Development Council (NAREDCO) is happy about this inclusion as it feels it would help control ‘fly by night’ developers who generally only build smaller projects. However they have pointed out that this inclusion will substantially increase the load on the authorities, as there are many more smaller projects that will need to be registered.
The Confederation of Real Estate Developers Association of India (CREDAI) thinks registration should go even further, and that there shouldn’t be any limit. They feel all developers should have to be registered.
The aim of the new legislation is to try to regulate and control developments, as well as the construction, sale and management of residential buildings and apartments. It is also intended that a website will be set up that will contain all project details.