Finally, much awaited bill finds an approval with the Cabinet. It is beter late than never, wil real estate customer woes being over for now. Atleast, the process has been sent in motion.
The Union Cabinet approved the bill to set up a regulator for the
real estate sector with provisions for jail term for the developer for
putting out misleading advertisements about projects.
Here are 10 things you need to know about the bill:
The
Real Estate (Regulation and Development), Bill 2013, seeks to make it
mandatory for developers to launch projects only after acquiring all the
statutory clearances from relevant authorities.
It also has provisions under which all relevant clearances for real estate projects would have to be submitted to the regulator and also displayed on a website before starting the construction.
It also has provisions under which all relevant clearances for real estate projects would have to be submitted to the regulator and also displayed on a website before starting the construction.
The
proposed legislation has certain tough provisions to deter builders from
putting out misleading advertisements related to the projects carrying
photographs of actual site. Failure to do so for the first time would
attract a penalty which may be up to 10 percent of the project cost and
a repeat offence could land the developer in jail. Moreover, any false
advertising implies that buyers will get full refund of the money
deposited with interest.
The bill also seeks to make it
mandatory for a developer to maintain a separate bank account for every
project to ensure that the money raised for a particular project is not
diverted elsewhere. According to a CNBC-TV18 report, developers have to
keep aside 70 percent of the buyers’ funds in a separate bank account
to ensure timely completion of projects. The buyers are entitled to full
refund with interest in case of delay in projects.
The
proposed legislation provides for clear definition of the ‘carpet area’
and would prohibit private developers from selling houses or flats on
the basis of ambiguous ‘super area’.
Under the proposed
new law, builders will be able to sell property only after getting all
necessary clearances. Registrations of projects with the regulatory
authority is a must. This means developers cannot offer any pre-launch
sales without the regulatory approvals. Moreover the authority must
approve or reject projects within 15 days.
Developers
will also be barred from collecting any money from buyers before
completing all necessary permits to start construction on the project.
Builders cannot take more than 10 percent of the advance from buyers without a written agreement.
The bill also seeks setting up of a real estate appellate tribunal for adjudicating disputes. The tribunal will be headed either by a sitting or a retired judge.
It also suggests setting up of a national advisory council to be headed by housing minister Ajay Maken to suggest ways to advise the regulator on crucial matters.
Now, much of the transparency will come into the system that was long due.
We are following up and keeping track of developments. Stay connected for the updates.
