After several flip flops, the Centre has finalised a crucial central law to regulate India’s growing real estate sector and prevent unscrupulous realtors from targeting property buyers.
The law ministry has cleared the draft of the Real Estate (Regulation & Development) Bill, proposed by the housing and urban poverty alleviation ministry. “The draft bill is likely to come up for cabinet approval soon,” said an official.
The bill proposes the setting up of a Real Estate Regulatory Authority in every state.
All builders working on projects where the land exceeds 1,000 square metres will have to register themselves with the regulatory authority before launching – or even advertising – their projects. Failure to do so will invite a maximum of three years’ imprisonment or a fine of up to 10% of the project cost.
The developer will also have to submit project details such as approved layout plan, timeline, cost, and sales agreement that prospective buyers will have to sign, to the proposed regulator. Only developers who fulfill this disclosure clause would be permitted to advertise their project to prospective buyers. Violation of contractual conditions will invite imprisonment of up to a year or fine extending to 5% of the project cost.
The bill will also contain safeguards for developers. Under the initiative, buyers who default on payment would be required to cough up substantial fines.
The regulatory authority will be headed by a chairman and two members – to be appointed by the state government concerned. A two-tier system will also be put in place to ensure redressal of buyer’s grievances – a regulatory authority at the state level and an appellate tribunal at the central one.
Developers are a bit cautious. “The bill gives additional powers to home buyers. However, from the developer’s perspective, it lacks teeth. It has put the onus on builders for delay in completing a project. But a project may lag due to reasons beyond developers’ reach, such as delay in getting approval from government authorities. In such a scenario, only the developer will face the flak. Authorities would be above the board,” said Lalit Kumar Jain, president, Confederation of Real Estate Developers Association of India. Source>>>