Real Estate
bill, 2013 Seeks Promoting Transparency and fair and Ethical Business Practices
in Real Estate and Housing Transactions
The Real Estate (Regulation and
Development) Bill, 2013 provides for specific provisions towards promoting
transparency and fair and ethical business practices, relating to transactions,
through disclosure of project details and contractual obligations vis-Ã -vis the
project and the buyer, which shall promote informed choice for the buyers.
Disclosure of project details shall substantially reduce the power asymmetry
prevalent in real estate transactions
Currently, the real estate and
housing sector is largely unregulated and opaque, with consumers often unable
to procure complete information, or enforce accountability against builders and
developers in the absence of effective regulation. The Bill is expected to
ensure greater accountability towards consumers, and to significantly reduce
frauds and delays. The Bill aims at restoring confidence of the general public
in the real estate sector; by instituting transparency and accountability in
real estate and housing transactions which in turn will enable the sector to
access capital and financial markets essential for its long term growth.
The specific provisions regarding
disclosure of project details are as follows:
Application
to Authority:
Sec 4. (1) Every promoter shall make an application to the Authority
for registration of the real estate project in such form, manner, within such
time and accompanied by such fee
as may be specified by the regulations made by the
Authority.
(2) The
promoter shall enclose the following documents along with the application
referred to in sub-section (1), namely:—
(a) a brief
details of his enterprise including its name, registered address, type of
enterprise (proprietorship, societies, partnership, companies, competent
authority)
and
the particulars of registration;
(b) an
authenticated copy of the commencement certificate from the competent authority
obtained in accordance with the laws as may be applicable for the real estate
project mentioned in the application, and where the project is proposed to be
developed in phases, an authenticated copy of the approval and sanction from
the competent authority for each of such phases;
(c) the
layout plan of the proposed project or the phase thereof, and also the layout
plan of the whole project as sanctioned by the competent authority;
(d) the plan
of development works to be executed in the proposed project and the proposed
facilities to be provided thereof;
(e) proforma
of the agreements proposed to be signed with the allottees;
(f) the
number and the carpet area of apartments for sale in the project;
(g) the names
and addresses of his real estate agents, if any, for the proposed project;
(h) the names
and addresses of the contractors, architect, structural engineer, if any, and
other persons concerned with the development of the proposed project;
(i) a
declaration, supported by an affidavit, which shall be signed by the promoter
or any person authorised by the promoter, stating,—
(A) that he has a legal title to the land on which the
development is proposed along with a legally valid authentication of such title
if such land is owned by another person;
(B) that the land is free from all encumbrances, or as the case
may be, of the encumbrances on such land including any rights, title, interest
or name of any party in or over such land along with details;
(C) the likely period of time within which he undertakes to
complete the project or phase thereof;
(D) that seventy per cent., or such lesser per cent. as
notified by the appropriate Government, of the amounts realised for the real
estate project from
the
allottees, from time to time, shall be deposited in a separate account to be
maintained in a scheduled bank within a period of fifteen days of its
realisation
to
cover the cost of construction and shall be used only for that purpose.
Explanation.— For
the purpose of this clause, the term ‘‘scheduled bank’’ means a bank included
in the Second Schedule to the Reserve Bank of India Act, 1934;
(E) that he has furnished such other documents as may be
prescribed by the rules or regulations made under this Act; and
(j) such
other information and documents as may be prescribed.
Function
and Duties of Promoter:
Sec 11. (1) The promoter shall, upon receiving his Login Id and
password under clause (a) of sub-section (1) of section 5 or under sub-section
(2) of section 5, as the case may be, create his web page on the website of the
Authority and enter all details of the proposed project as provided under
sub-section (2) of section 4, in all the fields as provided, including —
(a) details of the registration granted by the Authority;
(b) quarterly up-to-date list of number and types of apartments
or plots, as the case may be, booked;
(c) quarterly up-to-date status of the project; and
(d) such other information and documents as may be specified by
the regulations made by the Authority.
(2) The
advertisement or prospectus issued or published by the promoter shall mention
prominently the website address of the Authority, wherein all details of the
registered project have been entered and include the registration number
obtained from the Authority and such other matters incidental thereto.
(3) The
promoter, upon entering into an agreement of sale with the allottee shall be
responsible to make available to the allottee, the following information,
namely:—
(a) site and layout plans along with specifications, approved
by the competent authority, by display at the site or such other place as may
be specified by the regulations made by the Authority;
(b) the stage-wise time schedule of completion of the project,
including the provisions for water, sanitation and electricity.
(4) The
promoter shall—
(a) be responsible to obtain a completion certificate from the
relevant competent authority as per local laws or other laws for the time being
in force and to make it available to the allottees individually or to the
association of allottees, as the case may be;
(b) be responsible for providing and maintaining the essential
services, as may be specified in the service level agreements, on reasonable
charges, till the taking over
of the maintenance of the project by the association of the
allottees;
(c) take steps for the formation of an association or society
or co-operative society, as the case may be, of the allottees, or a federation
of the same, under the laws applicable.
(5) The
promoter may cancel the allotment only in terms of the agreement of sale:
Provided that the allottee may
approach the Authority for relief, if he is aggrieved by such cancellation and
such cancellation is not in accordance with the terms of the agreement of sale,
unilateral and without any sufficient cause.
(6) The
promoter shall prepare and maintain all such other details as may be specified,
from time to time, by regulations made by the Authority.
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