Sandeep Ahuja & Co.

Established in the year 1986, we are a leading chartered accountancy firm based in Delhi & NCR rendering comprehensive professional services which include statutory audit, internal audit, direct tax, transfer pricing, GST, bank audit, propriety audit, cost accounting, internal financial controls and risk advisory.

Thursday, April 9, 2015

Realtors and Property Agents to be Hit by Stricter Regulations

     The Real Estate (Regulation and Development) Bill, 2013 has been amended on Tuesday, April 7, 2015. This Bill provides a number of benefits to the Buyer and makes a few obligations on the Real Estate Developers to create a uniform regulatory mechanism in India. The Real Estate (Regulation and Development) Bill, 2013 aims at protecting the interest of consumers by regulating in such a manner that buyers get timely execution of projects and heavy penalties, including imprisonment is provided for the defaulting Developers.

Important Changes for regulation provided in the bill:

Ø  Every State will have a real estate regulator to settle disputes between buyers and the Developer or intermediary. All housing and commercial projects will be registered under regulatory authority to ensure that buyers can have access to genuine projects and even ongoing projects that have not received completion certificates will also be covered. The Developers after their registration with such authority will be allowed for advertising or launching of the project with the permission of such regulatory authority.

Ø  Developers will be allowed to sell or advertise not on the basis of super area but carpet area of a flat.

Ø  It will be mandatory for the developers to disclose layout plans and submit clearances with the regulator.

Ø  The name of the contractor, architect, structural engineer, etc. associated with the project will also be registered with regulatory authority to ensure transparency.

Ø  There is a provision for deposit of 50 per cent of the amounts realized from buyers in a separate bank account within 15 days by the promoters to ensure timely completion of the projects.

Ø  The Developers will be allowed to alter the layout plans, designs or any specification in any manner only with the consent of two-third buyers. In case of defaults the developer will be under obligation  to rectify structural defects free of cost and refund money in case the buyers so wish.

Ø  Even the Brokers or intermediary persons in any way involved in sale of flats and plots will mandatorily be registered with the real estate regulator and non compliance will be punishable.

Ø  The Buyers will have right to claim refund with interest and compensation from promoters in case of delay in completion of the project.

Ø  The projects will be de-registered and penalties will be imposed on the developer and fine can go up to 10 per cent of project cost in case of noncompliance or any violation of Rules. Even any false representation or wrong information will attract fine of 5 per cent of project cost.

Ø  The Bill if passed will help curb undeclared "black money" in property markets and save the Govt from revenue loss running into crores.

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