Lok Sabha Question No. 214 (STARRED), answered on 2016-11-30
Subject: Real Estate Rules
Ministry: HOUSING AND URBAN  POVERTY ALLEVIATION
Asked by: SHOBHA KARANDLAJE, MIDHUN REDDY

## GOVERNMENT OF INDIA

## MINISTRY OF HOUSING AND URBAN POVERTY ALLEVIATION LOK SABHA

## STARRED QUESTION NO. 214

TO BE ANSWERED ON NOVEMBER 30, 2016

## REAL ESTATE RULES

No. 214* KUMARI SHOBHA KARANDLAJE: SHRI P.V. MIDHUN REDDY:

Will the Minister of HOUSING AND URBAN POVERTY ALLEVIATION be pleased to state:

- (a) whether homebuyers have raised concerns over the Real Estate  Regulatory  Act/Rules  in  failing  to  protect  their interests rights and if so, the major concerns/grievances of the homebuyers;
- (b) whether  it  is  mandatory  for  developers  to  set  aside  70 per cent of the funds collected from buyers in a separate account and use that solely for funding the construction of the project and if so, the details thereof;

- (c) whether  homebuyers  have  desired  that  the  developers should deposit 70 per cent of the  unspent  money collected from buyers in an escrow account and if so, the details thereof;
- (d) whether  the  builders are reluctant  to  open  escrow account and if so, the action taken against such builders; and
- (e) whether the model rules have been framed for protection of homebuyers and if so, the details thereof?

## ANSWER

## THE MINISTER OF HOUSING & URBAN POVERTY ALLEVIATION (SHRI M. VENKAIAH NAIDU)

(a) to (e):   A Statement is laid on the Table of the Sabha.

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## STATEMENT

## STATEMENT REFERRED TO IN REPLY TO LOK SABHA STARRED QUESTION NO. 214 FOR 30.11.2016 REGARDING REAL ESTATE RULES

- (a): The  Ministry had  received suggestions  from  various stakeholders, including consumers and their organizations on the Real Estate Bill and the Draft Rules for Union Territories (UTs) without Legislature, prepared under the Real Estate (Regulation and Development) Act, 2016, which have been reviewed and suitably incorporated.
- (b): Under  Section  4  of  the  Real  Estate  (Regulation  and
- Development) Act, 2016, it is mandatory for promoters of real  estate  projects  registered  under  the  Act  to  deposit 70 per cent of the money collected from the buyers in a separate  account  for  the  purposes  of  construction  and land cost.
- (c): Consumer associations had demanded that 70 per cent of unspent money  collected from buyers in regard to ongoing  projects  should  be  deposited  in  a  separate account.  The  Ministry  has  suitably  incorporated  this provision in the Real Estate (Regulation and Development) (General) Rules, 2016 for the Union Territories  (UTs)  without  Legislature,  for  which  it  is  the appropriate Government.

- (d): Section 4 of the Real Estate (Regulation and Development)  Act,  2016  which  makes  it  mandatory  for promoters to open a separate account to set aside 70 per cent  of  the  funds  collected  from  buyers,  is  yet  to  be notified.
- (e): Ministry of Housing and Urban Poverty Alleviation (Mo/HUPA) being the 'appropriate Government' for Union Territories  (UTs)  without  legislature,  notified  the  Real Estate  (Regulation  and  Development)  (General)  Rules, 2016 and the Real Estate (Regulation and Development) (Agreement for Sale) Rules, 2016 on 31.10.2016.

All the State Governments are similarly required to frame Rules under this Act and also establish the Real Estate Regulatory Authority and Appellate Tribunal, to regulate and  develop  the  real  estate  sector,  for  their  respective States. Government of Uttar Pradesh and Government of Gujarat  have  notified  the  sub-ordinate  Rules  under  the Real  Estate  (Regulation  and  Development)  Act,  2016 within  the  prescribed  time  limit.  UT  of  Puducherry  has published  the draft Rules  in October,  2016,  inviting comments/suggestions from public and stakeholders. UT of Chandigarh has informed that they are in the process

of  establishing  an  interim  regulator.  UT  of  Dadra  and Nagar  Haveli  has  informed  that  being  a  small  territory and having a small administration consisting of very few officers, UT of Dadra & Nagar Haveli may be tagged along with the Real Estate Regulatory Authority and Appellate Tribunal of Maharashtra State.

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