Builders be Cautious
It’s some good news for the property buyers and investors. The real estate bill has been sent to the law ministry which if cleared will increase the transparency and keep up the builders quite on their toes.
As per the final sketch real estate bill that makes it compulsory for developers to disclose key aspects like,
- Carpet area and layout of the apartment and structural design and plans for other on-site development
- Cannot change plans or insert charges after the sale agreement is in place
- Disclose the nature of title of land to be developed
- Upload all the details of the future customers
- Cannot force buyers to pay advance without Sale Agreement
- Have to upload on the proposed authority’s website all certificates and details that can be accessed by any future customer
- Cannot float fancy advertisements to attract buyers
- If a builder pulls out of a project, the money has to be returned with interest at not more than the prevailing market rate
- If the land is owned by any other party, the developer has to upload the agreement with that party
- Cannot publish advertisements till projects are registered with the regulatory authority
- If there are any “structural defects or deficiencies” in a building within “a year of allotment”, they will have to be “rectified by the promoter”
If the Real Estate Bill, 2011 is cleared, developers can even be jailed for up to three years for making false promises to customers, many of whom invest their life’s savings for a place they can call their own. The jail term could be in addition to a penalty of 10 per cent of the total project cost. If there is any deviation from the ad, the promoter has to compensate the buyers for any loss because of the false information.
The proposed law envisages a real estate authority to regulate all developers and real estate agents. All developers will have to register with the authority; the first such body in the sector. The bill envisages an appellate tribunal, to be headed by a retired Supreme Court judge or a retired high court chief justice. The tribunal can start investigations on its own if it receives a complaint of violation.
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