Real estate transactions to be streamlined

Real estate transactions to be streamlined

  A regulatory authority will soon be in place to ensure that real estate developers or promoters adhere to their promise to buyers before selling property.

Failure of the developer to comply with the promise will attract punishment. To prevent unscrupulous real estate developers from deceiving gullible buyers, the Union Ministry of Housing and Urban Poverty Alleviation has proposed a bill—Real Estate (regulation of development) Act—which has been forwarded to stakeholders, including state governments.

This is a model bill, which will be placed before Parliament for passage. The bill proposes a real estate regulatory authority in each state, which will protect public interest “in relation to the conduct and integrity” of realty firms developing housing colonies and facilitate “smooth and speedy construction and maintenance” of colonies. The Act makes it mandatory for all promoters to submit details of the approved plans of projects along with a bank guarantee equivalent to 5 per cent of the estimated cost of construction to the authority. Besides, the promoter will also give an undertaking to complete the work in accordance with the conditions of registration.

After verifying the authenticity of the approved plan, the title of the property and other relevant details, the authority will register the project.

The details of projects will be posted on the authority’s website.  Also, documents relating to permission from the local authority as well as building plans will be made public.

The promoters will have to fulfill the promises. In case of violation of rules or failure to provide essential services to the developed plots, the registration will be cancelled after due verification.

The bank guarantee provided will be forfeited, and the names of the promoters will be included in the defaulters’ list and published on the authority’s website. Without registration, reality firms are not authorised to sell property.

Failure to comply with the provisions of the Act will attract imprisonment for a term extending up to three years or a penalty.

The registration of the real estate company will be valid for three years. The Act also bars promoters from advertising the project before it is registered with the authority.