In a significant development to have complete control on the builders, the Union Cabinet on Tuesday cleared the Real Estate (Regulation and Development) Bill, a tighter law for the real estate firms for selling housing projects. Builders and developers who become repeat offenders may even face a jail term of up to three years. The bill will bring cheer for the homebuyers in Indian cities.
The bill provides for the setting up a regulator and strict norms in the real estate sector. As per the bill, the builders will have to register all projects on plots measuring 4,000 sq metres or more with a regulatory authority. The projects can only be launched after getting the clearances from the relevant authorities.
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The significant bill also has provisions like a jail term of up to three years for real estate firms/builders/land developers who repeat offences like putting up misleading advertisements about projects. As per the bill, the builders will have to go for ads that will carry the photographs of the actual site. Failure to do so with the provisions for the first time would attract a penalty which may be upto 10% of the project cost and a builder may face jail term for repeat offences. The unorganised property agents will be brought under the purview of the regulator authority.
The bill makes it mandatory for a builder to maintain a separate bank account for each project to show the authority that the money raised for a particular project is not diverted to other projects. This also prohibits the private developers from selling houses or flats on the basis of the concept of super area.
In order to settle the disputes between the builders and customers, the bill also provides for the setting up a fast-track dispute resolution mechanism. With these provisions, a homebuyer will be benefited by owning a dream house in his favourite city or any part of the country.