Getting real about estate PDF Print E-mail
Wednesday, 05 June 2013 00:00
AddThis Social Bookmark Button
Given that lakhs of buyers have been duped by unscrupulous builders over the years, the Cabinet’s clearance of the Real Estate (Regulation and Development) Bill will come as a big relief with the caveat that, since 2009, the government has been trying to get one version or the other of the Bill through Parliament without any success. This time around may not be that different. If the Bill does translate into an Act, however, life can be quite different since each state will then have a regulator and an appellate tribunal to which real estate-related disputes will be referred to and, given these will be less crowded than courts, quickly adjudicated. More important, checks will be built in since builders won’t be allowed to start selling flats before they get all clearances; 70% of the amount collected from potential buyers will be deposited in an escrow account with funds earmarked for specific projects. There will be other rules like mandating builders to disclose the carpet area of each flat, give online details of the status of bookings, and so on. Builders, according to the rules, can even be imprisoned for breach of certain promises.


That is the theory, the reality will depend on how quickly the regulators/appellate tribunals are put in place and on the quality of those manning them. In the case of the electricity sector where the same principle of state-level regulators applies, state electricity regulatory commissions have proved to be largely useless when it comes to enforcing provisions in the law like compulsory open access which allows consumers to buy electricity from firms who offer better service or cheaper electricity. For now, however, the important thing is to get the Bill through Parliament so that individual state regulators can be put in place. Hopefully a good central regulator will put in place enough rules that the states can follow and, as in the case of the electricity sector, a forum of regulators can serve as a useful place to exchange experiences and ideas.


You are here  : Home Infrastructure/Urbanisation Getting real about estate