Ambitious realty bill to protect rights of harassed home buyers

Home buyers harassed by unscrupulous real estate developers and property dealers can heave a sigh of relief. The Union government is set to push through a regulatory bill for the realty sector in the budget session of Parliament.

The Real Estate (Regulation and Development) Bill is an ambitious move by the UPA government to rein in developers and protect the rights of property buyers across the country. The bill will be a major boon for buyers who are at the mercy of one-sided contracts by developers, poor quality of constructions and shady antecedents of housing projects. The bill also seeks the setting up of a Real Estate Appellate Tribunal to resolve disputes.

According to senior officials in the housing ministry, final touches are being given to the bill. Extensive month-long consultations have also been lined up to ensure that the bill can be introduced soon. “Unless some extraneous circumstances delay it, we are likely to introduce the bill in the coming session,” a senior ministry official told DNA.

Interestingly, consumer bodies pitched for the inclusion of property dealers and agents within the regulatory ambit during consultations with the ministry led by Union cabinet minister for housing Selja Kumari. This will ensure that contentious issues like brokerage or false promises can be tackled more effectively with a specific law in force.

“We have received representations from the industry and various other stakeholders. Further deliberations and consultations will take place and we will be able to pen a revised draft of the bill in a few weeks,” a senior official from the housing ministry told DNA.

Industry representatives have proposed that the approval process for real estate projects should be streamlined. According to officials, the government is looking at both the suggestions seriously and is likely to include them. “The ministry is working towards the modalities through which the brokers can be brought under the regulatory set up. Since the number of brokers is large, it cannot be done through a central legislation. So we are looking at empowering the upcoming regulatory authority to come out with guidelines for real estate agents,” the official said.

Experts believe standardisation is the way forward and that it will also lead to transparency in the realty sector.

“The first step that needs to be taken is formulating an eligibility criterion for becoming a broker and mandatory registration with the concerned authority. Secondly, standards need to be framed to cover aspects such as money laundering and conflict of interests,” said Sachin Sandhir, managing director, Royal Institute of Chartered Surveyors.

In the UK, the Estate Agents Act and the Consumer Redress Act regulate realty brokers who are registered with the two ombudsmen.

“If this is approved, it will help in increasing transparency in the realty sector and it may have some positive impact on the housing demand in the country,” said Samir Jasuja, CEO, PropEquity, a real estate data, intelligence and analytics firm, said. “However, the modalities on how brokers will be regulated still need to be fine-tuned. The government needs to take views of all stakeholders and then reach a consensus.”

As far as government approvals for launch are concerned, the ministry is fine-tuning the clauses keeping in mind that land is a state subject and falls under the jurisdiction of local governing and municipal bodies.

The bill has seen extensive deliberations since 2009 and picked up steam in the last few months. Incidentally, it was part of the 100-day agenda in the UPA-II after the 2009 general elections.

Later, a bill in form of a model bill to be emulated by the states was drafted. Subsequently, it was broad-based and redrafted to become a law that was mandatory for the state governments to follow.