Property News · January 29, 2016

The lowdown on India’s game-changing real estate bill


India’s regulatory bill is awaiting parliamentary approval
Image credit: The Business Standard
Aimed to establish a state-level agency that will protect the interests of property investors in India, the Real Estate (Regulation and Development) Bill 2015 (Bill) is now at the hands of Parliament.
The final draft of the Bill finally got the approval of India’s cabinet in December 2015, according to English-language daily dna India.
Applicable for residential and commercial real estate projects, the Bill calls for the regulation of all real estate transactions. It requires all registered projects to reveal all details of the development, from development, layout plan, approvals, agreements with property agents, the architectural and engineering details, among others.
More: India makes strides in regulatory changes and transparency
The Bill also makes it mandatory for developers or builders to deposit 70 percent of the sales proceeds from buyers into an escrow account in a bank within 15 days to cover construction costs. An earlier draft stipulated 50 percent of the proceeds.
According to the Business Standard, some builders in India use parts of the said amount to another project, which has been known to cause project delays.
Moreover the Bill’s latest draft covers smaller projects of at least 500 sqm, which was widened from the initial 1,000 sqm threshold.
“Not only will it protect the consumer but also encourage the individual buyer, both domestic and international, to invest in the real estate market,” said Anshuman Magazine, CBRE South Asia’s chairman and managing director.
More: Find out if Prime Minister Narendra Modi has made good on his real estate promises
Many developers are reportedly backing the Bill as well, and the national government is confident that it will be passed during the Budget sessions.
“This is one of the priorities of the government and no party has any objection since we have incorporated all their recommendations,” parliamentary affairs and housing minister M Venkaiah Naidu told the Times of India last week.
“We have increased the share of payments made by home buyers that has to be kept exclusively for individual projects. This was one of the major demands of the Congress party,” he noted.
Times of India estimates that up to 4,000 new real estate projects are launched every year, based on industry reports.

Source : property-report.com
Read more…The lowdown on India’s game-changing real estate bill

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