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Jan 31, 2013, 03.36 PM IST | Source: Personalfn.com

Can real estate Bill protect you as a property buyer

Can real estate (Regulation and Development) Bill protect you as a property buyer

The rapid real estate development in the country in the last decade has been rather fascinating for one to see and to vie for, to own a dream home . The skyline of cities has changed, with now high rise buildings visible in most areas due to cluster development. The rise in income levels and therefore the urge to elevate standard of living has introduced many to luxury and ultra-luxury living. Also, people have started viewing real estate as an asset class for investing, and not only one to move into a new home to live in. In the backdrop of the interest evinced by many towards real estate, the time has indeed come for regulated development to take place.

The Government now plans to bring to the Real Estate (Regulation and Development) Bill, to the Parliament in the budget session. The Bill has been framed under provisions dealing with "property transactions" in the concurrent list of the Constitution that applies to states, making the proposed legislation more than a model law.

The Real Estate (Regulation and Development) Bill has proposed the following, which intends to protect the interest of property buyers:

- Real estate developers will have to disclose project details and contractual obligations to ensure transparent, fair and ethical business practices. Hence there could be model agreement which could reduce ambiguities in real estate transactions, which you as buyer may not be familiar with.

- Moreover, the regulation will make it mandatory for private developers to register all projects before the sale they sell property to you as buyers. The property shall be registered provided that all necessary clearances have been obtained and all major concerns of the buyers are addressed about incomplete or fraudulent land acquisition .

- If the developer fails to declare the status of clearances, the Bill provides for levying a fine that can amount 10% of cost of project or three years of imprisonment.
 
- Also ensuring that the developer adhere to timelines, the Bill states that the realty player will have to park 70% of funds in a particular bank account, thereby precluding resources from being diverted and thus safeguarding property buyers.

- The Bill also enunciates that developers should sell a residential property on the basis of "carpet area", instead of the current practice of "super area", thereby ensuring that buyers get a better deal and transparency (over the how much carpet area you can enjoy) prevails.

How are realty player reacting to this...
Well, private developers are expressing discomfort over some of provisions of the said Bill. They are of the view that, they are already subject to several clearances and therefore there is no need for a regulator.

We are of the view that, a strong legislation would put a restrain on unethical and unscrupulous practices in the real estate industry, which from the outside looks very fascinating when the skyline of several Indian cities is changing. Yes, the penal interest provision could hurt realty players; but the Government seems to be inclined to protect the interest of real estate buyers (ahead of upcoming general elections next year) and regulate the sector well. If the Bill goes through by retaining the aforesaid provisions, it would indeed in the interest of several buyers - especially the middle class, for whom purchasing a property has been a herculean task (due to skyrocketing prices) and unscrupulous practice adopted by some developers.
However we are also of the view that, along with passage of the aforesaid Bill, the Municipal Authorities should also be directed to be more active in order to reduce the bureaucratic delays and discourage corruption at all levels.

PersonalFN is a Mumbai based Financial Planning and Mutual Fund Research Firm

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Mumbai
Capital Values Rate/Sq ft (INR)
Aajiwali
3000 - 5000
Ambernath
3000 - 5000
Badlapur
1000 - 3000
Bhandup (West)
11000 - 13000
Chembur (East)
15000 - 17000
Chembur (West)
11000 - 14000
Dombivali (East)
4000 - 6000
Ghatkopar
13000 - 15000
Heeranandani Gardens Estate - Powai
25000 - 30000
Hiranandani Gardens Estate - Powai
25000 - 30000
Kalyan (East)
2000 - 4000
Kalyan( West)
3000 - 5000
Karjat
1000 - 3000
Khandala
8000 - 10000
Kharegaon
5000 - 7000
King Circle
17000 - 28000
LBS Marg
12000 - 15000
Lonavala
3000 - 5000
Mulund (East)
11000 - 14000
Mulund (West)
11000 - 14000
Mumbai Nasik Highway
3000 - 6000
Powai
15000 - 17000
Senapati Bhagath Singh Road
3000 - 5000
Sion (East)
18000 - 21000
Sion (West)
17000 - 22000
Tilak Nagar
12000 - 22000
Ulhasnagar
3000 - 5000
Vikhroli
11000 - 14000
4 Bunglows
17000 - 28000
7 Bunglows
13000 - 23000
Chandivali
10000 - 15000
Malad (East)
12000 - 14000
Versova
21000 - 24000
Airoli
4000 - 8000
Belapur
6000 - 9000
Ghansoli
6000 - 8000
Kalamboli
4000 - 9000
Kamothe
4000 - 6000
Nerul
7000 - 10000
Palm Beach Road
12000 - 15000
Panvel
3000 - 6000
Sanpada
8000 - 10000
Sea Woods
8000 - 10000
Ulwe
3000 - 6000
Uran
3000 - 6000
Vashi
9000 - 12000
Altamount Road
62000 - 72000
Breach Candy
62000 - 74000
Chowpathy
48000 - 58000
Colaba
42000 - 46000
Cuffe Parade
67000 - 69000
Dadar(East)
32000 - 34000
Dadar(West)
29000 - 32000
Lower Parel
32000 - 34000
Mahalaxmi
38000 - 40000
Malabar Hills
68000 - 75000
Mumbai Central
23000 - 34000
Napean Sea Road
66000 - 74000
Parel
26000 - 34000
Prabhadevi
37000 - 39000
Tardeo
41000 - 49000
Worli
36000 - 41000
Andheri (West)
18000 - 20000
Andheri(East)
15000 - 17000
Bevarly Park
5000 - 7000
Bhayander (East)
5000 - 6000
Bhayander (West)
3000 - 5000
Boisar
1000 - 3000
Borivali (East)
11000 - 13000
Borivali (West)
10000 - 14000
Dahisar
4000 - 8000
Goregaon (East)
13000 - 17000
Goregaon (West)
12000 - 14000
Kandivali (East)
12000 - 14000
Kandiwali (West)
11000 - 12000
Malad(West)
9000 - 14000
Mira Road
5000 - 7000
Naigaon
1000 - 4000
Nala Sopara (Eastt)
3000 - 5000
Nalasopara (West)
3000 - 5000
Poonam Nagar
6000 - 8000
Shanti Nagar
7000 - 9000
Shrishti
6000 - 9000
Vasai Road
1200 - 4000
Virar
1000 - 3000
Note: Price trend are based on asking rate and not necessarily on the transaction date
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