A quick guide to some of the many changes made in our original Real Estate Regulatory Authority Bill to Favour Builders

Changes made by the BJP Govt. To favour Builders


1. Carpet Area was defined earlier in a clear and un-ambiguous manner as ‘net usable area’ in an apartment excluding the walls. It has been amended now with an explanation that the ‘net usable area’ will be ‘rentable area’ as defined in National Building Code 2005 or its later versions. This means that a) area has been defined in such a manner that it will further confuse the buyer; b) area as defined has been linked to the Building Code which can be amended later even without coming to the Parliament! 

2) In Earlier Bill, the Builders were not allowed to change the sanctioned plan once approved and the project is launched. But now the Builders can undertake ‘minor alterations’ just by intimating the Buyer. Here the extent or type of ‘Minor Alteration’ is not defined.

3) A new clause under definition is added further compounding confusion. It says that the ‘words and expressions used but not defined in this Act and defined in the National Building Code, 2005 or the Municipal Laws….. shall have the same meanings respectively assigned to them in those Acts’

4) In Earlier Bill, it was very difficult to seek deadlines for extension of projects. Now it is very easy to delay the project. Now it says ‘…. due to force majeure or under such conditions as may be prescribed which may include issue of completion certificate, approvals etc. without default on the part of promoter…..’. This can be easily misused by the builder to delay and litigate. 

5) In earlier Bill (in Section 4), the builder was under obligation to keep 70% of the amount realized from buyers from a particular project. This clause was introduced with the aim to ensure that builder doesn’t divert the money taken from home buyers and projects are completed timely. Now this Section has been weakened and the 70% limit is reduced to 50%.

6) Also the amended Bill allows members of Real Estate Regulatory Authority to take employment with private builders, after demitting office. This is repulsive amendment and this will encourage unholy nexus between Builders and the Authority.


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