Mumbai: Even though the Real Estate (Regulation and Development) Bill is expected to bring in transparency, it also brings with it challenges like timely project clearance which need to be addressed first, consultancy firm Jone Lang LaSalle has said.
The aim of the Bill is to create a real estate regulator and an appellate tribunal that will act as a watchdog for the housing sector with a view to protect the interest of consumers while creating an alternative redress mechanism for any disputes that may arise.
"The Bill demands greater disclosure from developers and a higher level of project accountability to remove the information asymmetries from the market. However, there is a need to analyse if certain inherent challenges facing the sector have been given a miss in this draft," JLL senior analyst Karan Khetan said in a statement.
"At first glance, the government is yet to streamline the approval process, which significantly slows down the project launch date and adds to the cost burden of the developer," he said.
Further, there is no clarity on which law will have precedence in the case of a dispute between the central and state policies, Khetan added.
"The idea of fostering greater transparency may come at the cost of housing projects becoming more expensive if the approval process adds to the holding cost of the developer.
"That the regulator will be effective and that this is a positive step is not debatable. However, the extent of effectiveness and the implementation at the state level are possible hindrances going forward," he added.