Real Estate Bill passed near unanimously by Rajya Sabha; MPs say Bill spurs the sector
Real Estate Bill passed near unanimously by Rajya
Sabha; MPs say Bill spurs the sector
Government lauded for accommodating suggestions of various parties in
the Bill
Chairman of Select Committee of the House complimented for widest
consultations
Implications of retrospective application of the Bill and discrimination
will be addressed in the Rules, says Shri Venkaiah Naidu
Bills can be referred to appropriate committees if the intention is not
to delay them and Parliament functions normally- Shri Naidu
Real Estate (Regulation &Development ) Bill, 2016 was today passed near
unanimously by the Rajya Sabha with almost all the parties welcoming the
Government’s decision requiring developers to deposit 70% of the collections
from the buyers in a separate account to meet construction costs including that
of land. Many members also welcomed the balance stuck in the Bill to enable
orderly growth of the sector in an atmosphere of trust and enhanced
credibility. They felt that the Bill is not anti-business and in fact, in the
long run prove to be a much desired catalyst for the real estate sector
benefitting both the consumers and project developers.
Many members praised Shri Anil Madhav Dave, Chairman of the Select Committee of
the House that examined the Bill for enabling widest possible
consultations in a very democratic manner resulting in useful suggestions which
were accepted by the Government.
Responding to various issues raised by the members during the three hour long
discussion on the Bill, Minister of Housing & Urban Poverty Alleviation
Shri M.Venkaiah Naidu said that the implication of bringing the real estate
projects under construction under the ambit of the Bill will be examined and
required clarity will be given in the Rules to be framed after enactment of the
Bill. Shri Rahman Khan (Congress) observed that the Bill provides for purchase
of houses based on carpet area and its implication to projects under
construction wherein houses have been allotted on super area basis needs to be
clarified.
Responding to the issue of competence of Parliament to legislate on real
estimate matters involving land raised by Shri Naresh Agarwal of SP and Shri
Rabi Bernard of AIADMK, Shri Naidu stated that this was examined thoroughly by
the Ministry of Law & Justice and the Attorney General and Central Law in
the matter was found to be valid.
On ensuring that there is no discrimination in sale of houses to certain
sections of the society raised by Ms.Selja and Shri Rajiv Gowda of Congress,
the Minister said that the Constitution offered protection against any such
discrimination and if required, this issue will be suitably addressed in the
Rules to be framed.
On the demand for applying the provisions of the Bill to all real estate
projects irrespective of plot size and number of apartments, Shri Naidu replied
that the Bill provides freedom to the States to relax the norm of plot size of
500 sq.mtrs or 8 apartments based on local situations.
Shri Naidu who is also the Minister of Parliamentary Affairs assured the House
that Bills could be referred to appropriate Committees for examination if
demands in this regard were not meant for delaying their consideration and
passage and if the Parliament was allowed to function without disruptions which
only delay legislation. He said so while responding to
the suggestion of Shri Jairam Ramesh who referred to the good work done by the
Department Related Standing Committee and the Select Committee of Rajya Sabha
by substantially improving upon the Real Estate Bill of 2013.
18 members spoke on the Bill. Reactions of some members of different parties on
the Real Estate Bill, 2016 were as below:
Ms.Selja
(Congress) :Our party was strongly committed to protect the interests of
consumers. I am happy that the Government decided in favour of 70% of
collections to be deposited in a separate bank account. I don’t mind the
Government taking credit for the same.
Shri Anil Dave
(BJP): The Select Committee could gauge the pain and suffering of consumers at
the hands of some unscrupulous promoters. The Bill will prove to be a boon both
for consumers and developers.
Shri Naresh
Agarwal (SP) : I am not against the Bill but only concerned about the Central
Law entering the domain of the States. Imprisonment of developers for any
violation straight away is being too harsh.
K.C.Tyagi (JDU)
: Chennai floods were a result of unregulated construction. Bengaluru also facing
several problems. Welcome the Bills that seeks to check irregularities.
Shri NadimulHaq
(Trinamul Congress) : Support the Bill though the remedial measures proposed
for the real estate sector do not seem to be broad enough.
Shri Rabi
Bernard (AIADMK) : Only MP to oppose the Bill on account of legislative
competency of Parliament.
Shri Munkad Ali
(BSP): Developers exploit the consumers by raising costs from time to time and
this needs to be checked.
Shri
RitabrataBannerji (CPM); Support the Bill. It should apply to all projects and
should ensure that there is no discrimination.
Shri
A.U.SinghDeo (BJD) : The Bill is long over due. Single window mechanism
necessary to ensure speedy approvals for construction projects.
Shri Praful
Patel (NCP): Intention of the Bill is noble and honourable and marks a good
beginning. Results will follow in due course. Land needs to be opened up to
decongest core central areas of cities.
Shri Rajiv
Chandrasekhar :Bill is the most pro-consumer initiative of the Government. Both
the UPA and NDA governments stood firmly on the Bill which is certainly not
anti-business. It promotes competition and efficiency.
Shri Anil Desai
(Shiv Sena) : Bill strikes a balance protecting the interests of consumers and
genuine consumers.
Shri Venkaiah Naidu thanked the members and parties for their enthusiastic
support to the Bill.
***********
Rajya Sabha clears Real Estate Bill seeking to make
consumer the king
Bill to foster a happy alliance between consumers and developers, says
Shri M.Venkaiah Naidu
Notoriety in real estate sector needs to be ended to encourage
investment flows, says the Minister
If telecom sector with a few operators has a regulator, real estate
sector with over 76,000 companies needs one-Shri Naidu
Original Bill of 2013 undergoes substantial changes for the better
Rajya Sabha today approved the Real Estate (Regulation and Development)
Bill,2016 that seeks to protect the interests of the large number of aspiring
house buyers while at the same time enhancing the credibility of construction
industry by promoting transparency, accountability and efficiency in execution
of projects. The Bill seeks to put in place an effective regulatory mechanism
for orderly growth of the sector which is the second largest employer after
agriculture.
Moving the Bill pending in Rajya Sabha since 2013 for further consideration and
passing, Minister of Housing & Urban Poverty Alleviation Shri M. Venkaiah
Naidu stated that over the years the sector has acquired a degree of notoriety
which needs to be addressed to enable enhanced flow of investments, for which
the Government has announced several incentives in the Budget for 2016-17 and
earlier.
Shri Naidu further said that consumer has become the king in telecom
sectorfurther to introduction of a regulator. While there are only a few
operators in telecom sector, a total of 76,044 companies are involved in real
estate sector including 17,431 in Delhi, 17,010 in West Bengal, 11,160 in
Maharashtra, 7,136 in Uttar Pradesh, 3,054 in Rajasthan, 3,004 in Tamil Nadu,
2,261 in Karnataka, 2,211 in Telangana, 2,121 in Haryana, 1,956 in Madhya
Pradesh, 1,270 in Kerala, 1,202 in Punjab and 1,006 in Odisha.
Stating that real estate sector contributes about 9% GDP, the Minister informed
the House that between 2011 and 2015, new projects in the range of 2,349 to
4,488 were launched every year amounting to a total of 17,526 projects with
investment value of Rs.13.70 lakh cr in 27 cities including 15 state capitals. According
to industry information, about 10 lakh buyers invest every year to own a house
of their own.
Shri Naidu asserted that with so many operators in the sector and such huge
investments at stake, regulating the real estate sector has become necessary in
the interest of consumers and developers. He said: “Consumer shall be the king
as in telecom sector and the developer obviously the queen. And there shall be
a happy marriage between the two for both to live happily ever after and the
Bill seeks to forge such a happy alliance for the benefit of real estate
sector.”
The Minister said that several rounds of consultations were held with consumer
and developer bodies, state governments and other stakeholders before and
after introduction of the Bill in Rajya Sabha in 2013 and as a result,
the Bill has undergone substantial changes benefitting the sector as a whole.
Shri Naidu outlined the improvements made in the Bill of 2016 as follows:
1.The
Government has gone beyond the recommendation of the Select Committee and now
requiring developers to deposit 70% of the collections form buyers in a
separate accounts towards the cost of construction including that of land as
against a minimum of 50% suggested by the Select Committee;
2. Norms for
registration of projects has been brought down to plot area of 500 sq.mts or 8
apartments as against 4,000 sq.mt proposed in the draft Bill in 2013 and 1,000
sq.mts or 12 apartments suggested by the Standing Committee;
3. Commercial
real estate also brought under the ambit of the Bill and projects under
construction are also required to be registered with the Regulatory Authority.
About 17,000 projects are reported to be at various stages of development;
4.Capret area
has been clearly defined which forms the basis for purchase of houses,
eliminating any scope for any malpractices in transactions
5.Ending the
earlier asymmetry which was in favour of developers, both consumers and
developers will now have to pay same interest rate for any delays on their
part;
6.Liability of
developers for structural defects have been increased from 2 to 5 years and
they can’t change plans without the consent of two thirds of allottees;
7.The Bill
provides for arranging Insurance of Land title, currently not available in the
market which benefits both the consumers and developers if land titles are
later found to be defective;
8.Specific and
reduced time frames have been prescribed for disposal of complaints by the
Appellate Tribunals and Regulatory Authorities; and
9.A provision
is now made for imprisonment of up to 3 years for developers and up to one year
in case of real estate agents and consumers for any violation of Tribunals and
Regulatory Authorities.
The Bill requires project promoters to register their projects with the
Regulatory Authorities disclosing project information including details of
promoter, project including schedule of implementation, lay out plan, land
status, status of approvals, agreements along with details of real estate
agents, contractors, architects, structural engineers etc. Shri Naidu said that
this enables transparent, accountable and timely execution of projects.
The Minister further said that the Real Estate Bill,2016 enables the people
meet their genuine aspirations of owning a house including those of urban poor
by giving a fillip to affordable housing initiative under which the Government
intends to enable construction of 2 crore by the year 2022 under Prime Minister’s
Awas Yojana (Urban).
Chronology of events leading to the passage of Real Estate Bill by Rajya
Sabha:
-Ministry of Law
& Justice suggested a Central Law for regulation of real estate sector in
July, 2011;
-Union Cabinet
approved the Real Estate Bill, 2013 on June 4,2013;
-Bill was
introduced in Rajya Sabha on August 14, 2013;
-Bill was
referred to the Department Related Standing Committee on September 23,2013;
-Report of the
Standing Committee was tabled in Rajya Sabha on February 13 and in Lok Sabha on
February 17,2014;
-Attorney
General upheld validity of central legislation for real estate sector on
February 9,2015;
-Union Cabinet
approved Official Amendments based on the recommendations of the Standing
Committee on April 7,2015;
-Bill of 2013
and Official Amendments referred to the Select Committee of Rajya Sabha on May
6, 2015;
-Select
Committee tables its report along with the Bill of 2015 on July 30,2015;
-Real Estate
Bill, 2015 was approved by the Union Cabinet on December 9, 2015;
-Bill,2015 was
listed for consideration and passing in Rajya Sabha on 22nd and
23rd December, 2015 but could not be taken up; and
-The Real
Estate (Regulation & Development) Bill, 2016 passed by Rajya Sabha on March
10,2016.
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