Real Estate in India was in major need of regulation of transactions between the buyers and sellers and there was a need to protect the interest of the customers. India is a nation which has a very high percentage of aspiring home buyers as owing a property is a matter of pride and a dream of everyone. At the same time, the customers of today who are majorly millennials want professionalism, transparency, accountability and efficiency in the home buying and selling process. The good news is that the Bill has laid a very solid foundation for building and implementation of what the consumers want. It was one of the most awaited revolution in the Real Estate market and is finally in action now. With a major agenda of the bill being the protection of the customer’s interest, it will ensure accountability in our sector. It’s a very encouraging move by the government which will positively impact our sector and will bring a peace of mind to the customers whose lifetime savings are at stake.
We feel that one of the major highlight of the Bill is the parking of 70% of the amount collected by the buyers in the separate account which will be used only for the construction of the project. We have always had issues with the delays in the delivery of the projects. With this 70% of the initial amount going into various costs like the construction of the project, land cost etc, it is assured that the funds of the customer are not diverted to other projects. The government is trying to ensure that the developers do not fall short of funds and therefore, can work effectively towards timely delivery of the projects to customers. It is ultimately paving the way towards matching the demand and the supply gap in the sector along with bringing back the lost confidence of the customer in real estate. With the registration, timely completion and complete handover of the project becoming mandatory, the buyers will see the project development happening not only papers but in real. The best part is that the bill has positives for buyers, developers as well as brokers and it will collaboratively make it more effective and long-term.
Home sales have slowed down and one of the biggest reasons for that is the delay in the construction of the projects. There were many other provisions in the bill which created a huge buzz all over. Earlier when there was no regulation in the sector, there were no ways to track where the realtor is using the funds collected from their respective clients. With so much to deliver and no authority to look forward to, the developers were always in the news for making the use of money from one project for the completion of some other project. With the mandatory registration and timelines coming in place along with penalties being charged for any delay; everything in real estate will come in place.
India is a very vast country and the cost of project varies from city to city. With the provision that the state government can alter this amount to less than 70% if the need be, is another positive that the Bill brings with itself. All the realtors will have to maintain their books of accounts and facilitate the possession of all documents that the buyer is entitled to and there can be no false claims regarding any hidden cost/services as everything will have to declared by the developer initially. All these positive sides of the revived version of Real Estate Bill will bring realty sector back on track. Our other major concern is the Single Window Clearance of the projects which is another major factor for the project delays. I am sure that with all the issues being addressed, in future there will be some provision for this as well.