The Real Estate Bill which seeks to protect the interests of homebuyers and allow more transparency in the housing sector was passed by the Lok Sabha today.
Soon after the bill was cleared, urban development minister M Venkaiah Naidu tweeted “the passage of #RERABill is an example of our commitment to total transformation... I did my duty. States are given power. Now states should follow it up with timely approvals... Single window approval system is being developed for ensuring timely completion of housing projects.”
Earlier, the minister explained to Lok Sabha members various facets of the bill. He said the bill was a pro-reform step undertaken by Prime Minister Narendra Modi’s government in order to bring about ease of doing business in the country. “We can no longer perform without reforms,” he said.
The Real Estate Regulator (Regulation and Development) Bill, pending before parliament since 2013, got approval of the Rajya Sabha on March 10.
A major benefit for consumers proposed in the bill is that builders will have to quote prices based on carpet area and not super built-up area, while carpet area has been clearly defined in the bill to include usable spaces like kitchen and toilets.
The bill makes it mandatory for all commercial and residential real estate projects where the land is over 500 square metres, or eight apartments, to register with the regulator for launching a project, in order to provide greater transparency in project-marketing and execution.
For failure to register, it proposes a penalty of up to 10% of the project cost or three years’ imprisonment.
Naidu said the main purpose of the bill is to protect consumer interest.
“Sometimes we are called pro-business, I do not mind being called that. After all business and industry (people) are also Indians,” he said, adding the interests of farmers and consumers will also be protected.
Naidu also assured the construction industry that the measure would help attract greater flow of investment, including foreign, and ultimately help bring down cost of borrowing. The bill would also help in enhancing credibility and acceptability of developers.
He also assured the industry that ongoing projects would not come to a standstill because of the legislation which has been approved by the Rajya Sabha with the support of almost all parties, except AIADMK.
Allaying concern of the industry, Naidu said the provision of imprisonment in the bill was certainly not the first but the last option.
He said development and environment had to be factored in together for the housing sector as no one could afford damage to nature.
The minister said the bill also provides for imprisonment of up to three years in case of promoters and up to one year in case of real estate agents and buyers for any violation of orders of Appellate Tribunals or monetary penalties or both. A minimum of 70% collections from buyers was proposed to be deposited in separate escrow account to cover cost of construction and land.
Initiating the debate, K C Venugopal (Congress) said he was happy that Naidu admitted that the bill was the baby of the UPA government. He said the bill was needed to help the poor get housing, but cautioned that the central legislation and the laws enacted by various states should not be inconsistent with each other.
Supporting the Bill, Prem Das Rai of Sikkim Democratic Front said that since the real estate business was in the inception stage in the Himalayan state, a Real Estate Development Authority should be constituted by the Centre in consultation with states.
A Sampath (CPI-M) said the nation was longing for such a bill but it still needs “some more teeth”.
M K Premachandran of RSP said the legislation should have a provision to prevent usage of cultivable land for real estate.
Supporting the bill, Rajesh Ranjan (RJD) said unless the poor did not get purchasing power, the bill would not serve its purpose. He said the bill did not provide for 50% reservation to the ST/SC and the OBCs in real estate.