The Real Estate (Regulation and Development) Bill, 2013 provides for specific provisions towards promoting transparency and fair and ethical business practices, relating to transactions, through disclosure of project details and contractual obligations vis-à-vis the project and the buyer, which shall promote informed choice for the buyers. Disclosure of project details shall substantially reduce the power asymmetry prevalent in real estate transactions
Currently, the real estate and housing sector is largely unregulated and opaque, with consumers often unable to procure complete information, or enforce accountability against builders and developers in the absence of effective regulation. The Bill is expected to ensure greater accountability towards consumers, and to significantly reduce frauds and delays. The Bill aims at restoring confidence of the general public in the real estate sector; by instituting transparency and accountability in real estate and housing transactions which in turn will enable the sector to access capital and financial markets essential for its long term growth.
The specific provisions regarding disclosure of project details are as follows:
Application to Authority:
Sec 4. (1) Every promoter shall make an application to the Authority for registration of the real estate project in such form, manner, within such time and accompanied by such fee as may be specified by the regulations made by the Authority.
(2) The promoter shall enclose the following documents along with the application referred to in sub-section (1), namely:—
(a) a brief details of his enterprise including its name, registered address, type of enterprise (proprietorship, societies, partnership, companies, competent authority) and the particulars of registration;
(b) an authenticated copy of the commencement certificate from the competent authority obtained in accordance with the laws as may be applicable for the real estate project mentioned in the application, and where the project is proposed to be developed in phases, an authenticated copy of the approval and sanction from the competent authority for each of such phases;
(c) the layout plan of the proposed project or the phase thereof, and also the layout plan of the whole project as sanctioned by the competent authority;
(d) the plan of development works to be executed in the proposed project and the proposed facilities to be provided thereof;
(e) proforma of the agreements proposed to be signed with the allottees;
(f) the number and the carpet area of apartments for sale in the project;
(g) the names and addresses of his real estate agents, if any, for the proposed project;
(h) the names and addresses of the contractors, architect, structural engineer, if any, and other persons concerned with the development of the proposed project;
(i) a declaration, supported by an affidavit, which shall be signed by the promoter or any person authorised by the promoter, stating,—
(A) that he has a legal title to the land on which the development is proposed along with a legally valid authentication of such title if such land is owned by another person;
(B) that the land is free from all encumbrances, or as the case may be, of the encumbrances on such land including any rights, title, interest or name of any party in or over such land along with details;
(C) the likely period of time within which he undertakes to complete the project or phase thereof;
(D) that seventy per cent., or such lesser per cent. as notified by the appropriate Government, of the amounts realised for the real estate project from the allottees, from time to time, shall be deposited in a separate account to be maintained in a scheduled bank within a period of fifteen days of its realisation to cover the cost of construction and shall be used only for that purpose.
Explanation.— For the purpose of this clause, the term ‘‘scheduled bank’’ means a bank included in the Second Schedule to the Reserve Bank of India Act, 1934;
(E) that he has furnished such other documents as may be prescribed by the rules or regulations made under this Act; and
(j) such other information and documents as may be prescribed.
Function and Duties of Promoter:
Sec 11. (1) The promoter shall, upon receiving his Login Id and password under clause (a) of sub-section (1) of section 5 or under sub-section (2) of section 5, as the case may be, create his web page on the website of the Authority and enter all details of the proposed project as provided under sub-section (2) of section 4, in all the fields as provided, including —
(a) details of the registration granted by the Authority;
(b) quarterly up-to-date list of number and types of apartments or plots, as the case may be, booked;
(c) quarterly up-to-date status of the project; and
(d) such other information and documents as may be specified by the regulations made by the Authority.
(2) The advertisement or prospectus issued or published by the promoter shall mention prominently the website address of the Authority, wherein all details of the registered project have been entered and include the registration number obtained from the Authority and such other matters incidental thereto.
(3) The promoter, upon entering into an agreement of sale with the allottee shall be responsible to make available to the allottee, the following information, namely:—
(a) site and layout plans along with specifications, approved by the competent authority, by display at the site or such other place as may be specified by the regulations made by the Authority;
(b) the stage-wise time schedule of completion of the project, including the provisions for water, sanitation and electricity.
(4) The promoter shall—
(a) be responsible to obtain a completion certificate from the relevant competent authority as per local laws or other laws for the time being in force and to make it available to the allottees individually or to the association of allottees, as the case may be;
(b) be responsible for providing and maintaining the essential services, as may be specified in the service level agreements, on reasonable charges, till the taking over of the maintenance of the project by the association of the allottees;
(c) take steps for the formation of an association or society or co-operative society, as the case may be, of the allottees, or a federation of the same, under the laws applicable.
(5) The promoter may cancel the allotment only in terms of the agreement of sale:
Provided that the allottee may approach the Authority for relief, if he is aggrieved by such cancellation and such cancellation is not in accordance with the terms of the agreement of sale, unilateral and without any sufficient cause.
(6) The promoter shall prepare and maintain all such other details as may be specified, from time to time, by regulations made by the Authority