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Draft Real Estate (Regulation & Development) Bill, 2011, Draft Model Property Rights to Slum Dwellers Act, 2011 and Central Legislation for Street Vendors

Posted in REAL ESTATE by NNLRJ INDIA on November 11, 2011

Draft Real Estate (Regulation & Development) Bill, 2011, Draft Model Property Rights to Slum Dwellers Act, 2011 and Central Legislation for Street Vendors

Ministry of Housing & Urban Poverty Alleviation notified the `Draft Real Estate (Regulation & Development) Bill, 2011`, The Draft Model Property Rights to Slum Dwellers Act, 2011` and Central Legislation for Street Vendors at a Press Conference in New Delhi.

I.  Draft Real Estate (Regulation & Development) Bill, 2011

 The Draft Real Estate (Regulation & Development) Bill, 2011 seeks to establish a regulatory oversight mechanism to enforce disclosure, fair practice and accountability norms in the real estate sector, and to provide adjudication machinery for speedy dispute redressal. This Act is in pursuance of the powers of Parliament to make laws on matters enumerated in the Concurrent List namely, transfer of property other than agricultural land; registration of deeds and documents, and contracts including partnerships, agency, contracts of carriage, and other special forms of contracts, but not including contracts relating to agricultural land.  The Bill aims at restoring confidence of the general public in the real estate sector; by instituting transparency and accountability in real estate and housing transactions.  Currently, the real estate and housing sector is largely unregulated and opaque, with consumers often unable to procure complete information, or enforce accountability against builders and developers in the absence of effective regulation.  The sector, in recent years, has also emerged as a source of black money and corruptions in the economy. The Bill is expected to ensure greater accountability towards consumers, bring transparency and fairness in transactions and reduce frauds and delays significantly. All of these factors would make sizable dent in the corruption in this sector.

 The Bill is also expected to promote regulated and orderly growth through efficiency, professionalism and standardization. It seeks to ensure consumer protection, without adding another stage in the procedure for sanctions.

 The salient features of the Draft Real Estate (Regulation & Development) Bill are:

  1. Establishment of a ‘Real Estate Regulatory Authority’ in each State by the Appropriate Government (Centre for the UTs and State Governments in the case of the States), with specified functions, powers, and responsibilities to facilitate the orderly and planned  growth of the sector;
  2. Mandatory registration of developers / builders, who intend to sell any immovable property, with the Real Estate Regulatory Authority as a system of accreditation;
  3. Mandatory public disclosure norms for all registered developers, including details of developer, project, land status , statutory approvals and contractual obligations;
  4. Obligations of promoters to adhere to approved plans and project specifications, and to refund moneys in cases of default;
  5. Obligation of allottee to make necessary payments and other charges agreed to under the agreement and payment of interest in case of any delay;
  6. Provision to compulsorily deposit a portion of funds received from the allottees in a separate bank account, to be used for that real estate project only;
  7. The Authority to act as the nodal agency to co-ordinate efforts regarding development of the real estate sector and render necessary advice to the appropriate Government to ensure the growth and promotion of a transparent, efficient and competitive real estate sector; as also establish dispute resolution mechanisms for settling disputes between promoters and allottees/ buyers;
  8. Authorities to comprise of one Chairperson and not less than two members having adequate knowledge and experience of the sector;
  9. Establishment of a ‘Real Estate Appellate Tribunal’ by the Central Government to hear appeals from the orders of the Authority and to adjudicate on disputes.  Tribunal  to be headed by a sitting or retired Judge of Supreme Court or Chief Justice of High Court with 4 judicial and at-least 4 administrative/technical members;
  10. Chairperson of the Tribunal to have powers to constitute Benches, for exercising powers of the Tribunal;
  11. Establishment of a Central Advisory Council to advise the Central Government on matters concerning implementation of the Act.
  12. Council to make recommendations on major questions of policy, protection of consumer interest and to foster growth and development of the real estate sector;
  13. Penal provisions to ensure compliance with orders of the Authority and Tribunal;
  14. Jurisdiction of Civil Courts barred on matters which the Authority or the Tribunal is empowered to determine;
  15. Both Centre and States to have  powers to make rules over subjects specified in the Bill, and the Regulatory Authority to have powers to make regulations;
  16. Powers to Central Government to issue directions to States on matters specified in the Act have also been specified.

 II.  Draft Model Property Rights to Slum Dwellers Act, 2011

The Ministry of HUPA proposed the strengthening of its Slum redevelopment strategy by working towards a slum free India, and assigning property rights to Slum Dwellers, under the Rajiv Awas Yojana (RAY). RAY proposes decisive action for inclusive urban development that acknowledges the presence of the poor in cities, recognizes their contribution as essential to the city`s functioning, and redresses the fundamental reasons for inequity that ties them down to poverty.

 The conferment of property title is a new direction for national policy that aligns national approach to the global practice. It sees ownership of property as the best investment in democracy, by creating for the household due space within the formal system, and thereby a vested interest in peace and legal order.

 The Model law is aimed at bringing within the formal system, those who are forced to live in extra-formal spaces and in denial of right to services and amenities available to those with legal title to city spaces, and at correcting the deficiencies of the formal system of urban development and town planning that have failed to create conditions of inclusiveness and equity, so that, henceforth, new urban families, whether by way of migration or natural growth of population, have recourse to housing with civic amenities, and are not forced from lack of options to create encroachments and slums and live extralegal lives in conditions of deprivation of rights and amenities.

 The Model law intends to enable the household to access the formal channels of credit; it draws the entire extralegal economy of slums out of the informal market; it enriches the slum dweller by giving him access to mortgageable rights for housing construction, and the formal economy by enabling a quarter of its population to participate in its growth. The importance that Central Government gives to this measure for inclusion and equity may be gauged from the decision to link central support for slum redevelopment with the empowering of the slum household with property rights.

The salient features of the Draft Model Property Rights to Slum Dwellers Act, 2011 are:

  1. Facilitation of inclusive growth and slum-free cities, to provide assured security of tenure, basic amenities and affordable housing to the slum-dwellers.
  2. Every landless person living in a slum area in any city or urban area on 4th June, 2009 shall be entitled to a dwelling space at an affordable cost.
  3. Every Slum dweller or the Collective of the Slum Dwellers shall be given a legal entitlement, which shall be in the name of the female head of the household or in the joint name of the male head of the household and his wife.
  4. Every slum dweller eligible shall be provided with basic civic services until the site for the dwelling space has been developed.
  5. The dwelling space so provided shall not be transferable but allowed to be mortgageable for raising housing loan, or in need to sell- but only to the Government or the Collective as the case may be.
  6. The dwelling space may be provided in-situ as far as possible, provided in cases on public interest they shall be resettled elsewhere.
  7. Constitution of a Grievance Redressal Committee for the purposes of resolving disputes in relation to matters about identification of slum dwellers.
  8. State Government shall prescribe and notify participative and transparent procedures for identification and periodic survey of slum dwellers for purpose of granting legal entitlement to slum dwellers.
  9. Establishment of City / Urban Area Slum Redevelopment Committee for implementing the provisions of the Act namely- to survey and make a list of slum dwellers, make an inventory of existing position regarding slum areas, formulate schemes for slum redevelopment/up-gradation/resettlement and for rental housing (including dormitories and night shelters) for the urban poor and slum-dwellers in-eligible etc.
  10. Establishment of a State Slum Redevelopment Authority (to be headed by the Chief Minister) to continuously monitor implementation of the Act and to recommend corrective measures wherever necessary.
  11. Emphasis on Community Participation by providing for establishment of Slum Development Committee for each slum area comprising of members for plan preparation, implementation, monitoring & evaluation, and post project maintenance.
  12. Power to acquire land for redevelopment/up-gradation and for resettlement under the Land Acquisition Act, 1894 as amended from time to time.
  13. Responsibility of the Government to prevent encroachment or of construction of illegal structures towards which necessary amendment to the Municipal and other Acts need to be undertaken.
  14. Civil courts not to have jurisdiction on matters for which the City/Urban Area Slum Redevelopment Committee, State Slum Redevelopment Committee, Grievance Redressal Committee, or the Tribunal is empowered.
  15. Power of the State Government to make rules on matters specified in the Act.

  III.  Credit Risk Guarantee Fund

 To address the issue of credit enablement of EWS and LIG households, the Ministry proposes to create a Credit Risk Guarantee Fund Scheme (CGFS) under Rajiv Awas Yojana. The salient features of the proposed fund are as follows:

Under the Credit Guarantee Fund Scheme (CGFS) the Government of India will provide credit guarantee support to collateral-free / third-party-guarantee-free housing loans up to Rs. 5 lakh extended by lending institutions for Low Income Housing. The CGFS will cover the housing loans to EWS/ LIG borrowers for the purposes of repairs, home improvement, construction, acquisition, and purchase of new or second hand dwelling units, involving an amount not exceeding Rs. 5 lakh per loan. The guarantee cover available under the scheme is proposed to be to the extent of 90% of the sanctioned housing loan amount for a loan amount of upto Rs.2 lakh. And 85% for loan amounts above Rs.2 lakh and upto Rs. 5 lakh. To administer and oversee the operations of the Scheme, provision has been made for establishment of a Credit Risk Guarantee Fund Trust for low income housing (CGFT). Rs.1000 crores has been earmarked as an initial Corpus for CGFS.

  IV.  Central Legislation for Street Vendors

The Ministry of Housing & urban Poverty Alleviation had come up with a new National Policy on Urban Street Vendors in 2009 after a comprehensive review of the previous policy. The Policy underscores the need for a legislative framework to enable street vendors to pursue an honest living without harassment from any quarter. We had drafted a Model Street Vendors (Protection of Livelihood and Regulation of Street Vending) Bill, 2009 and circulated to all States/UTs, requesting them to take a cue while legislating on the subject. The progress on state legislation has not been encouraging.  We are receiving continuous representations from the individual street vendors and their organisations to bring a central legislation which would be uniformly and mandatorily applicable to all the states and UTs. We are working to evolve and effective and practical central legislation for protection of livelihood rights and social security of street vendors in consultation with all concerned stakeholders including State Government.

 The bill would be based on the following basic principles:

  1. Legitimate street vendors are protected from harassment by police and civic authorities.
  2. Vending zones/spaces are demarcated for the street vendors. While demarcating the concept of traditional natural markets to be kept in mind.
  3. Adequate representation to street vendors and women in particular, is provided in the institutional structures created for ensuring proper implementation of the proposed law.
  4. A robust, effective and quick grievance redressal and dispute resolution mechanism is established.

 

REAL ESTATE BILL 2011   

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One Response

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  1. nam said, on July 20, 2014 at 15:32

    real estate bill needs to be amended properly,area below 4000 sqmtrs shoulod be brought under the bill.also builders/contractors qualifications be defined.The builders/contractors should be civil engineers background.


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