Builders to be leashed through realty regulator
New Delhi- The new regulator has just proved to be beneficial for the buyers, as it will keep the builders on a tighter leash while selling their projects.
With the new regulatory law in effect, the builders can no more sell their projects based on their initiated ‘super area’ concept rather they will sell their residential properties in India on the basis of the carpet area.
The regulator will help in ensuring the housing projects declare the status of key civic clearances. The government has planned to get the real estate regulation and development bill in the upcoming budget session. This bill has been framed under the provisions which deal with the property transactions from the constitution list implied to all the states.
However, to ensure the developers deliver projects on deadline, the proposed law will declare that the realty players will have to deposit about 70 percent of the funds in any of the bank accounts in order to avoid diverting the resources and not keep the buyers waiting.
Having a real estate regulator in each state will ensure that the private developers register all the projects prior to the sale of the property and they will address major concerns of buyers about incomplete or fraudulent land acquisition only after getting all the necessary clearances.
As per the bill’s provisions, if a developer fails to declare the status of clearances, he will be imprisoned for three years or will be fined with an amount of 10 percent of the project cost.
In order to ensure transparency and fair ethical practices, the realty players should disclose the project details and contractual obligations. Also there can be a model agreement which will be created to reduce complications in the real estate transactions which buyers are not aware about.
The proposed bill has caused an uproar among the private builders as they are against some of the bill’s provisions. They have expressed their objections in a meeting held by the housing minister and urban development minister.
The builders feel that there is no need for the regulator since the clearance is already done from various agencies. As per them, the government is favouring just the buyers.
Related Real Estate News:
Real Estate Regulation and Development Bill 2011 to bring more transparency in the Realty Sector
Government to introduce realty sector regulatory bill
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