Calcutta, Aug. 10: The Mamata Banerjee government has drafted a bill to protect home buyers that so far appears to have refrained from following many states which have watered down central provisions.
The West Bengal Housing Industry Regulation Bill, which has been circulated but not yet tabled, is almost identical to the Real Estate (Regulation & Development) Act promulgated by the Centre. Several states had chosen to frame diluted rules under the central act but Bengal is seeking to enact a law of its own.
Following are some of the key features of the Bengal bill:
• All ongoing projects that are yet to get a completion certificate will come under purview of an authority that will regulate the segment. Each phase of a large development will be treated as an individual project requiring registration under the authority. Several states had diluted this provision by exempting ongoing projects.
• The authority will seek and upload on its web site details of a project and the record of the builder.
• The builder must rectify free of cost any structural defect detected up to five years from the date of handing over possession.
• Seventy per cent of the amount received from buyers in a project has to be kept in a separate bank account to cover the cost of construction. Promoter can withdraw from this account in proportion with the percentage of completion. This provision is aimed at averting diversion to other projects -- a recurring and debilitating problem.
• Apart from minor changes, any addition or alteration of sanctioned plans of building or the common area cannot be done without the written consent of two-thirds of buyers. Even if a person owns multiple flats in a project, his or her consent will be quantified as that of one person.
• If a builder fails to deliver on time and buyer wishes to withdraw from project, full refund, along with interest and compensation, will be mandatory.
• If a promoter fails to comply with provisions for registering a project with the authority, a penalty of 10 per cent of the project cost can be imposed. Failure to comply with the orders of the authority can attract a three-year jail term.
Nandu Belani, the president of the real estate body Credai Bengal said the act would bring in transparency, trust and accountability in the sector. "Developers who are compliant will exist in the long run. This will benefit the buyer and clean up the system."
"The act will come into effect when passed in the Assembly and Governor's consent received. But for all practical purpose, it will operationalise when rules are framed under the act and the Authority start functioning," said Sucharita Basu, partner of law firm Aquilaw.