To safeguard the interests of property buyers and ensure transparency in the real estate sector, the Centre announced a new draft bill on Friday.
Minister of housing and urban poverty alleviation Kumari Selja unveiled the draft Real Estate (Regulation & Development) Bill 2011 which the ministry aims to introduce in the winter session of Parliament.
"The bill seeks to establish a regulatory oversight mechanism to enforce disclosure, fair practice and accountability norms in the real estate sector, which is presently unregulated and opaque," said Selja.
Apart from making it mandatory for builders/developers to register with the Real Estate Regulatory Authority before launching a project, the bill will also ensure that they submit project details such as land status, statutory approvals, cost and contractual obligations.
"It is only after the mandatory disclosure—displayed on the regulator's website—that a developer would be given the registration certificate and permitted to advertise/launch a project," said housing secretary AK Mishra.
Lalit Kumar Jain, president of Confederation of Real Estate Developers' Association of India said, "We will study it and make our submission to the ministry. Prima facie we are opposed to licensing for projects which can become a breeding ground for corruption."
The bill has penal provisions for builders who deviate from the information disclosed to the regulator and also violate contractual agreement. "The developer can be charged 10% of the project cost or imprisonment for a maximum of three years for violation," said an official. The bill also has safeguards for developers. Buyers who default on payment would be fined.