Mumbai // A much-awaited law on real estate in India aimed at protecting homebuyers was passed yesterday and is expected to help revive interest in property.
The real-estate regulation and development bill, which was cleared by the Rajya Sabha, or India’s upper house in parliament, is designed to bring transparency and regulation to the property sector. The lack of these factors had been deterring many potential homebuyers, including expatriates.
Under the new law, there will be harsh punishments for unscrupulous developers, as well as fines for delays. It also paves the way for the establishment of a real estate regulatory authority.
Anshuman Magazine, the chairman and managing director of CBRE South Asia, said that the legislation would have “a far reaching implication for the real estate and construction sector”.
He added: “If implemented in the right spirit, it could facilitate greater volumes of domestic as well as overseas investment flows into the sector. Homebuyer confidence in the property market is also likely to revive.”
Demand for Indian homes has been slack in recent years, as buyers have been put off by steep interest rates and high prices.
Anuj Puri, the chairman and country head of JLL India, said that the passage of the bill marked “an unequivocal victory for the Indian real estate sector”.
Mr Puri said: “Its enactment as a law will almost single-handedly revamp the way this sector works across the board, from developers to end-users and investors, to lending institutions and government agencies involved in the buying and selling of property.”
The bill applies to residential and commercial projects.
“The real-estate industry welcomes the major reform that promises to bring in much-needed transparency and accountability to the rather opaque sector, Mr Puri said. It will create a much needed consumer right protection umbrella for buyers of real estate, as well as creating lasting developer brands strong on quality and timely delivery of their projects.”
But Mr Puri added that a “single window” clearance was needed for developers to speed up permissions, otherwise builders could end up being unfairly punished for delays beyond their control to projects.
Anil Pharande, the chairman of Pharande Spaces, a residential developer in Pune, said the law would “have a profoundly positive effect on how both domestic and global investors view Indian real estate”.
Kishor Pate, the chairman and managing director of Amit Enterprises Housing, an Indian developer, also welcomed the move.
“Strict enforcement of project delivery timelines, verifiable construction quality and assurance of legal clearances will finally become a reality, and the consumer confidence, which had all but evaporated, will return,” he said.
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