Real Estate Regulatory Bill is expected to be tabled in Parliament today. The bill will bring about much needed transparency in the sector.
The Real Estate Regulatory Bill is expected to be tabled in Parliament today reports CNBC-TV18’s Nayantara Rai. The bill will bring about much needed transparency in the sector.
A quick look at pros and cons of the Bill
The home buyers will what they pay for because builders will have to quote on basis of carpet area. Moreover, the builders will have to pay penalties if the project deviates even 10 percent from the building plan. The builders cannot even change the layouts, building plans without the consent of 66 percent of buyers. All this is positive for the consumers.
The bill also proposed to bring in a level playing field - In case of delayed payment, the buyers will be levied a rate of interest which will be same as the builder will pay in case of delay in project. As of now builders typically demand 18 percent penalty for payment delay of even 15 days but offer only Rs 5 per square feet even if the project is delayed by 3-4 years.
However, there are certain things that may not be in favour of the consumers – basically, the contentious 70 percent lock-in amount that the builder has to keep in an ESCROW account for project. Although the buyers may feel safe about this at the moment, the builders may lose fungibility of money and any possible interest that they could earn and so a price hike could become imminent, which could be negative for consumers.
Another negative is that one will have to approach only a consumer court for any disputes and cannot go to the civil court.
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