With an aim to provide a uniform regulatory environment to the real estate sector, the government has approved the real estate bill to set up a regulator for the sector. The law will cover any developer coming up with a project of 1,000 sq metres and above. The bill has various provisions like a jail term of up to three years for developers who make offences like putting up misleading advertisements about projects repeatedly.
The bill also intends to make it mandatory for developers to launch projects only after acquiring all statutory clearances from relevant authorities. Further, 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 bill also makes it mandatory for builders to clarify the carpet area of the flat, which would be made uniform for the entire country.
The proposed real estate bill includes tough provisions to deter builders from using pictures of housing projects in foreign countries to lure buyers while advertising a project. They will have to use pictures reflecting the actual project, which will be delivered to home buyers. The developers will have to maintain a separate bank account for a particular project, and will not be allowed to divert the money for other projects. Failure to compliance for the first time would attract a penalty which may be up to 10 per cent of the project cost and a repeat offence could land the developer in jail up to three years.
The regulator will act only if there is a complaint of any deviation from the project details disclosed by a developer. Further, the bill also prohibits developers from collecting any money from buyers before completing all necessary permits to start construction on the project.
