USIBC Member Knight Frank India Explains the Implications of the Passage of the Real Estate Bill
The Real Estate Bill, passed by both Houses of Parliament earlier this month, takes within its ambit many factors, including development as well as redevelopment and therefore, paves the way for a smooth road ahead. The Bill will impact the sector, positively, at two levels—ﬁrst at the micro level, of homebuyers, and second at a macro level of the entire real estate sector.
MICRO LEVEL IMPACT
• More transparency
• Timely completion and delivery
• Level playing field for homebuyers and developers
• Better quality buildings
• Majority to hold sway
• Speedy justice
MACRO LEVEL IMPACT
• Panacea for ills
• Confidence booster
• A perfect market – addresses asymmetry
• Regulator at the state level
The two pillars through which the Bill seeks to bring about efﬁciencies in the sector is the Regulator and the single window clearance. The Regulator will be in place, a year after the Act comes into force, but if systems are not in place for single window clearance, from the local body the central level, this will further create operational challenges for developers.
Though it appears that developers have got a raw deal, the Bill will ensure that only serious players remain in the real estate sector. This will lead to greater transparency, which, in the long run, will allow the sector to access institutional funds, at a competitive cost. The provisions in the Bill may also give the impression that urban development bodies will not have a major role if the Bill becomes an Act. This is not true. Even when the Bill becomes an Act, in its current form, urban development bodies will have a role to play. They will have to undertake the same role that they are currently playing. Urban local bodies will have to deal with issues pertaining to land usage. Regulatory authorities, on the other hand, will largely deal with various issues related to buyers and sellers. Now that the Bill has been passed by both the Houses of Parliament it is just a step away from becoming an Act after it receives the Presidential assent.
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