A Bill providing for setting up a regulator for the real estate sector and having provisions like a jail term of up to three years for developers who make offences like putting up misleading advertisements about projects repeatedly was approved by the government on Tuesday. The Real Estate (Regulation and Development) Bill, approved by the cabinet, seeks to provide a uniform regulatory environment to the sector. A regulatory body on the limes of TRAI is proposed.
As and when the Bill gets enacted, it will look to provide considerable relief to the ordinary buyer and investor, who goes through innumerable obstacles when buying a property and at times is duped by even small developers, builders and brokers.
Here are some of the benefits of the bill
- Developers can launch projects only after getting all relevant clearances.
- Developers cannot offer any pre-launch sales without the regulatory approvals.
- Authorities have 15 days to approve or reject a project.
- Construction to begin only after the developer's website has displayed all details of the project including receipt of clearances.
- Builders to specify the carpet area of the flat instead of giving the super built-up area artificially inflated
- The buyers are entitled to full refund with interest in case of delay in projects.
- Realty developers will have to maintain a separate bank account for every project to ensure funds raised for one project is not diverted.
- It will be mandatory to keep 70% of the buyers’ funds in a separate bank account to ensure timely completion of projects.
- Developers cannot take more than 10% of the advance from buyers without a written agreement.
- Builders will have to use photographs of actual site for advertisements purpose. Failure to do so will attract a penalty which may be up to 10 percent of the project cost.
- Repeat offenders may land in jail.
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