JOIN USCentre okays real estate regulator
The Centre on Tuesday approved legislation for setting up a regulator for the real estate sector. The move is purported to protect the interests of home buyers and provides for a jail term of up to three years for private developers for cheating customers with false advertisements.
The Real Estate (Regulation and Development) Bill, approved by the Union Cabinet, has been pending since 2007 due to pressure from the real estate lobby. The bill is likely to be tabled in the monsoon session of Parliament.
All builders involved in projects spread over 1,000 sq metre or more will have to register themselves with the real estate regulatory authority before launching or even advertising for their project.
According to the bill, private developers have to sell houses in residential projects on the basis of carpet area or built up area. This rule would help in phasing out the concept of super area, which is often used to mislead customers. Besides, all relevant clearances for real estate projects have to be submitted to the regulator and uploaded on a website before starting construction.
The bill also mandates that every developer should maintain separate bank accounts for individual projects to ensure that funds raised for a particular venture is not diverted elsewhere. The law suggests that the cost of construction of a particular project will have to be kept in a separate account. A developer should not collect money from buyers until the builder gets approval from the agencies concerned.
Before advertising for any project or starting construction, the developers have to put up the project details, including mandatory clearances, on the regulator’s website. Besides, the advertisements should have photographs of the actual site and homes which will be delivered to the consumers.
Failure to comply for the first time would attract a penalty of up to 10 per cent of the project cost, while repeat offenders could land up in jail for up to three years.
The Ministry of Housing and Urban Poverty Alleviation is working on bringing all projects under a single-window clearance. While state governments will appoint their respective regulators, the Urban Development Ministry will appoint the regulator for Delhi.
Big relief
* Houses in residential projects to be sold on the basis of carpet area or built up area.
* Before advertising or starting construction, project details have to be put up on
regulator’s website.
* Failure to comply for the first time would attract a penalty of up to 10 per cent of the project cost.
* Repeat offenders to get up to three-year jail term.