Soon, there would be a set of tough rules on how the country's real estate developers conduct business with their customers. The apex body of the industry — Confederation of Real Estate Developers Association of India (CREDAI) — is planning to establish a code of conduct for companies in the realty market during its national convention to be held from January 7-9, 2008. The primary objective: to establish transparency and a fair-dealing process between developers and their customers.
A developer's membership from the CREDAI could be terminated if he is found to have violated the code. The state association that he is a part of would share the developer's fate as well.
According to property experts, expulsion from the apex body could have serious ramifications for developers who are now scouting for foreign investment, especially since big-ticket investors always prefer to crosscheck the developer's credentials before investing.
Among some of the important provisions of the code are rules to guide property under development, including provisions of a distinguishing “title certificate” from a solicitor/advocate. It advises developers to start booking only after obtaining a sanction of plans and clearances from competent authorities. The code also lays down norms regarding payment procedures and construction costs. The developer should not enhance the price of the flats once the agreement for sale is executed, except for additional levies, taxes etc.