New Delhi, Feb. 20: Homebuyers can now look forward to a Parliament-approved safety net.
The Real Estate Regulatory Bill, a first-of-its-kind effort aimed at streamlining the sector, is set to be tabled during the budget session starting tomorrow, as differences between two key ministries have been finally sorted out.
“We will be sending the bill soon for the cabinet’s consideration and are confident that it will come up during the budget session,” housing minister Ajay Maken said.
The bill had been placed before the cabinet in October but was caught in a turf war between the urban development ministry and the housing ministry. It was deferred after urban development minister Kamal Nath claimed the bill should have been steered by his ministry. Last month, the Prime Minister’s Office stepped in to iron out the differences over the planned legislation, which had run into opposition from the builders’ lobby.
Sources said the housing ministry had circulated a draft of the bill and received comments from all ministries. The bill promises a host of things for homebuyers. It says all state governments should have regulatory authorities and makes it compulsory for all developers to register with these authorities. Even property dealers will have to register with these authorities. Builders will have to disclose the exact carpet area of houses they put up for sale.
A key problem the bill addresses is that of “open space” that shrinks as the demand for flats grows. According to the bill, Maken said, once a builder has declared a certain area as open space, he “cannot go back” on his declaration. “If the regulatory authorities receive complaints, he can be fined too.”
Before launching a project, builders will have to get all requisite clearances from the government. This is to ensure builders cannot blame delays on getting clearances.
Builders have to declare the deadline for a project, while an agreement between a builder and a buyer has to be vetted by the regulatory authority concerned.
The government is looking to increase the compensation that a buyer receives in case of delays. “Currently, if the project is delayed, the builder pays as little as Rs 5 per sqft. The authorities, while vetting the builder-buyer agreement, has to look into this,” Maken said.
Builders can be fined 5-20 per cent of the project cost for violations.