In real estate sector several regulatory changes took place in recent times. More changes are in work. Main aim of this change is to protect buyers’ interests where few of them carry a cost.
During the monsoon session of the parliament Transparency in Land Acquisition the Right to Fair Compensation and Rehabilitation and Resettlement Bill, 2012, was passed. This bill was passed to improve the compensation paid to the landlords whose lands where taken for the infrastructure, industrialization, urbanization and development. The main intention of the bill is to provide minimum payment to the landlords by paying twice the market value in urban areas and four times in rural areas.
On the other side the major problem of landlords are that they are paid very less compensation in respect to their lands. Related cost and litigation cost is expected to reduce.
It has been said that the legislation is going to increase the cost land acquisition for developers and makes real estate expensive to our end users. This is not completely true. The Bill applies only to those developers who will be going acquire 50 acres of urban land or 100 acres rural land. Smaller parcels of land are developed through residential, retail real estate and commercial project.
If a developer is planning to build a large township have to bear the Bill’s provision. The clause which has direct clause is enhanced compensation clause and resettlement and rehabilitation bill. As the market value has been defined it can also lead to the wrong assessment of land price. Depending upon the registered sale deeds the market value will be determined. The Bill should have internationally recognized valuation standards for the land market to function.
The higher compensation will delay in acquisition and affects the project cost which could lead to higher cost charged from buyers in large projects.
Official review blog of raja housing ltd 