The much awaited Real Estate (Regulation and Development) Bill, seeking to regulate and make real estate sector more transparent has been approved by the Cabinet. The Bill that would oversee only the residential real estate sector will be presented during the monsoon session of the Parliament in August.

The Bill necessitates establishment of one or more real estate regulatory authorities in every state/UT, to oversee real estate transactions. According to Crisil, the Bill will improve buyer confidence and boost demand for residential real estate. The Bill will incorporate mandatory disclosure clauses, which would provide greater clarity on the project standards and timelines for completion. For developers, while the Bill implies stricter regulatory control, it will also translate into better demand, as buyer confidence improves.

In terms of supply, delays in handover of projects are likely to decline as clauses mentioned in the Bill mandate strong commitment from developers to complete projects as per schedule.

The Bill proposes that all residential projects with plot areas of 4,000 sqm or more need to be registered with a regulator, which will be possible after the developer submits all necessary clearances. This clause is expected to impact developers in all major cities, except in case of Mumbai, where the Bill will have limited impact due to smaller plot areas. Developers also need to disclose details on the carpet areas of all flats, layout plans, plans of development works, and the architect and structural engineers.