In a move that will go a long way in safeguarding property buyers’ interest from land sharks, the cabinet on Tuesday cleared the Real Estate (Regulation & Development) Bill.
The housing and poverty alleviation ministry intends to introduce it during the monsoon session of the Parliament.
The bill will make it mandatory for developers to get themselves registered with the Real Estate Regulatory Authority to be set by respective states. All such builders -- developing a project where the land exceeds 1,000 sq metre -- will have to register themselves with the authority before launching or even advertising their project. Not doing so will invite up to a maximum three years imprisonment or fine of up to 10% of the total project cost. However, the penalty won’t be imposed on first-time defaulters.
Commercial real estate, however, has been kept out of the ambit of the bill.
The bill also has strict penal provisions for builders who default on contractual agreement or deviate from layout plan. There will also be a two tier system in place to ensure redressal of buyer’s grievance – a regulatory authority at state and an appellate tribunal. This is a crucial issue as presently, except for going to the civil courts which is a time consuming process, there is hardly any redressal mechanism for buyers.
Approval to Registration Act
The Cabinet on Tuesday also cleared the much-awaited amendments to the Registration Act. The amendments propose to make registration of rental agreements compulsory in most cases. Among other changes, even Power of Attorney—a popular route to transfer ownership of properties—will also come under the net of registration.