After many and many
flip flops, the Central government has finalised a crucial central law to
regulate India’s growing real estate sector and prevent unscrupulous Realtors
from targeting property buyers.
Real Estate Regulatory Authority..!
The law ministry has
cleared the draft of the Real Estate (Regulation & Development) Bill,
proposed by the housing & urban poverty alleviation ministry.
According to an
official “The Real Estate draft bill is likely to come up for cabinet approval
soon,” .
The bill proposes the
setting up of a Real Estate Regulatory Authority in each and 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 3 years’ imprisonment or a fine of up to 10 per
cent of the project cost.
The real estate
developer or promoter 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 or
promoter 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 per cent the project
cost.
Bill also safeguards
for developers..!
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 2 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 /
promoters are a bit cautious.
Mr. Lalit Kumar Jain,
President, CREDAI (Confederation of Real Estate Developers Association of
India) said , “The bill gives additional powers to house 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,” .
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