Dear All,
As You might be aware of the Latest Norms issued by Union Cabinet for the Developers, Pan India. We here by are providing the Bullet Points mentioned by the Union Cabinet.
We have also mentioned our views for the same.
Our views are personal & not biased to any Developer.
We would like the members to add on their valuable advice in the same.
Norms for Real Estate Builders by Union Cabinet
Union Cabinet has cleared the long awaited proposal for Regulator for Real Estate Development.
The Regulator will be set up in every state to ensure the Projects gets Registered & all necessary
approvals are obtained before the builder starts with Sale.
Mandatory Disclosures to Public has to be done for – Credentials of Promoters, Lay Out Plan, Land
Status, Carpet Area, Number of Apartments booked, Status of Statutory Approvals,.
Projects will be sold on Actual Carpet Area, not on Super Area.
NO picturesque advertisements, Only Actual Site photographs.
Developer will have to deposit 70% of the project cost in a bank account. This will ensure the on time
delivery of the projects.
A Penalty of 10% of Project Cost would be introduced in the bill.
A Model Builder Buyer Agreement is expected to be released.
Real Estate Brokers / Consultants have to be registered for the transaction to happen in Secondary
Market through them.
Commercial Projects have been kept away from this Bill as of now.
Our Views
There would be chaos in the real estate market in the short term.
Real estate developers will have to buckle up as the days of “no accountability” will be over.
The phenomenon of “topi ghumana”, where in the builders used to launch one project and use the
money collected thereby, to create more land bank would be over. Money collected for a particular
project will have to be used for construction of the same project.
The economic slowdown, liquidity crunch along with the proposed bill should bring down the already
cooling land prices further, albeit in the short to medium term.
There will be series of mergers and acquisitions in the industry, wherein some smaller real estate
players will be forced to shut shop. We see a lot of consolidation happening in the industry.
The “investors/financers” who used to book flats at the time of “pre-launch/launch” stage, pay 10-20-
30% money and sit on their bookings will be forced out of the market.
The market should get organized with clear terms and conditions along with deliverables.
The prices for the projects will go up significantly as projects would be sold on Carpet Area.
Rate of Interest for Late Payments by buyer might be increased, unless government fix the ROI.
Markets like Noida Extension etc will again face a problem a earlier projects were launched at 10%
margin money to Authority but now they need to get the land registered before offering the sales.
Developers will start cancelling the units for the payments which have been delayed for a significant
time.
Slowdown in fresh projects launching.
Union Cabinet should have covered the Commercial Projects too. Assured Return schemes will come
to a halt if the Proposal is same as for Residential.
Real Estate Market to see some Positive Vibes after this.
Write to us globalinvestmentmantra@gmail.com
As You might be aware of the Latest Norms issued by Union Cabinet for the Developers, Pan India. We here by are providing the Bullet Points mentioned by the Union Cabinet.
We have also mentioned our views for the same.
Our views are personal & not biased to any Developer.
We would like the members to add on their valuable advice in the same.
Norms for Real Estate Builders by Union Cabinet
Union Cabinet has cleared the long awaited proposal for Regulator for Real Estate Development.
The Regulator will be set up in every state to ensure the Projects gets Registered & all necessary
approvals are obtained before the builder starts with Sale.
Mandatory Disclosures to Public has to be done for – Credentials of Promoters, Lay Out Plan, Land
Status, Carpet Area, Number of Apartments booked, Status of Statutory Approvals,.
Projects will be sold on Actual Carpet Area, not on Super Area.
NO picturesque advertisements, Only Actual Site photographs.
Developer will have to deposit 70% of the project cost in a bank account. This will ensure the on time
delivery of the projects.
A Penalty of 10% of Project Cost would be introduced in the bill.
A Model Builder Buyer Agreement is expected to be released.
Real Estate Brokers / Consultants have to be registered for the transaction to happen in Secondary
Market through them.
Commercial Projects have been kept away from this Bill as of now.
Our Views
There would be chaos in the real estate market in the short term.
Real estate developers will have to buckle up as the days of “no accountability” will be over.
The phenomenon of “topi ghumana”, where in the builders used to launch one project and use the
money collected thereby, to create more land bank would be over. Money collected for a particular
project will have to be used for construction of the same project.
The economic slowdown, liquidity crunch along with the proposed bill should bring down the already
cooling land prices further, albeit in the short to medium term.
There will be series of mergers and acquisitions in the industry, wherein some smaller real estate
players will be forced to shut shop. We see a lot of consolidation happening in the industry.
The “investors/financers” who used to book flats at the time of “pre-launch/launch” stage, pay 10-20-
30% money and sit on their bookings will be forced out of the market.
The market should get organized with clear terms and conditions along with deliverables.
The prices for the projects will go up significantly as projects would be sold on Carpet Area.
Rate of Interest for Late Payments by buyer might be increased, unless government fix the ROI.
Markets like Noida Extension etc will again face a problem a earlier projects were launched at 10%
margin money to Authority but now they need to get the land registered before offering the sales.
Developers will start cancelling the units for the payments which have been delayed for a significant
time.
Slowdown in fresh projects launching.
Union Cabinet should have covered the Commercial Projects too. Assured Return schemes will come
to a halt if the Proposal is same as for Residential.
Real Estate Market to see some Positive Vibes after this.
Write to us globalinvestmentmantra@gmail.com