New Delhi, March 10

The Rajya Sabha passed a bill today to regulate the real estate sector, protect home buyers and ensure the timely execution of projects with an aim to boost investor confidence and stamp out illegal practices.

The new rules, applicable to residential and commercial developments, will make it mandatory for all projects and brokers to be registered with the real estate regulator who will oversee transactions and settle disputes.

The bill will apply to new and ongoing projects.

Over the years, the sector has acquired a degree of notoriety which needs to be addressed to enable enhanced flow of investments, Venkaiah Naidu, minister of housing and urban poverty alleviation said in parliament when tabling the bill.

During recent years sluggish economic growth and delays in getting approvals stalled several projects, leaving buyers waiting for their homes and developers holding high debts. It has also put a strain on investors such as banks, private equity firms and non-banking financial companies.

The bill, designed to bring transparency and accountability to the sector that contributes about nine per cent of India’s gross domestic product, is expected to revive investor and buyer confidence.

“It will help distinguish good real estate companies that conduct business by the book from those who have not ... It will make buyers more confident and will perk up market sentiments as well,” said JC Sharma, managing director of Sobha Ltd.

The new law is expected to benefit developers such as DLF Ltd, Oberoi Realty, Prestige Estates Projects Ltd and Godrej Properties, among others.

It is also likely to help Prime Minister Narendra Modi achieve his election promise of providing homes for all Indian families by 2022.