Centre gives in, allows states to set up real estate bodies
Buckling under pressure from states, the Centre has decided to allow them to set up their own grievance redressal mechanism to protect property buyers' interests from unscrupulous realtors.delhi Updated: Oct 11, 2012 23:44 IST
Buckling under pressure from states, the Centre has decided to allow them to set up their own grievance redressal mechanism to protect property buyers' interests from unscrupulous realtors.
In a U-turn, the Housing and Urban Poverty Alleviation ministry, which has finalized the draft of Real Estate Regulatory Authority Bill, has dropped the original provision to set up a central real estate appellate tribunal.
Apprehending that the bill might face opposition over this clause, the ministry has decided to allow states to set up their own appellate authority.
The ministry had earlier received several representations from states demanding to set up their own grievance redressal mechanism.
The tribunal's role will be to adjudicate any dispute between a developer and an allottee as also between the developer and the real estate regulatory authority. “We have agreed to the states' demand to set up their own appellate tribunal,” said a ministry official.
The draft bill is likely to come up for cabinet approval soon. The original bill has gone through several changes over the past year to make it palatable to states, including Uttar Pradesh, West Bengal, Tamil Nadu and Chhattisgarh, which had opposed it on the ground that it infringes on the federal structure.
The bill proposes setting up of a real estate regulatory authority at every state.
All such builders — developing a project where the land exceeds 1000 square metre — will have to register themselves with the body before launching or even advertising their project.
Failure to do so will invite up to a maximum three years imprisonment or fine of up to 10% of the total project cost.
The developer will also have to submit project details including approved layout plan, timeline, cost and the sale agreement that prospective buyers will have to sign to the proposed regulator.
Only developers who fulfil this disclosure clause would be permitted to advertise their project to prospective buyers.