Bhubaneswar, May 2: The state government yesterday enforced the Odisha Real Estate Regulation and Development Rules, 2017, to protect the interests of consumers and bring in transparency in the ever-growing real-estate sector.

Odisha joins 12 other states and Union territories - Uttar Pradesh, Gujarat, Andhra Pradesh, Maharastra, Madhya Pradesh, Bihar, Andaman and Nicobar Islands, Chandigarh, Dadra and Nagar Haveli, Daman and Diu and Lakshadweep - that have enforced the rules.

In consonance with the Centre's Real Estate (Regulation and Development) Act, 2016, the state government has formed a Real Estate Regulatory Authority and a Real Estate Appellate Tribunal. While the authority will look after grievances of homebuyers, the tribunal will assist the authority in resolving the disputes. In case of any violation by the developers or agents, the tribunal has the power to sentence violators to three years in jail.

The new rule makes it mandatory for developers to register their projects - completed and ongoing - with the authority. The rule also stipulates builders to deposit 70 per cent of the funds collected from clients towards booking amount in a separate bank account for construction of the project.

Officials feel this provision will ensure timely completion of project as funds could be withdrawn only for construction purposes.

The rules also have provisions of penalties for developers in case of delay in project execution.

With the new rule coming into effect, developers will have to disclose their project details on the regulator's website and provide updates on construction.

In case of project delays, the obligation of paying the monthly interest on bank loans taken for under-construction apartments or flats will lie with the developers rather than homebuyers.

"The rules have several good provisions that which will help property buyers and bring a check on the monopoly of real-estate developers," said Bhubaneswar Development Authority vice-chairman Krishan Kumar.

Real-estate developers have also welcomed the rules.

"We welcome the move of the government to finally enforce the real estate regulation and development rules. The rules will help homebuyers and also those of us who are conducting the transactions in a transparent manner. These rules will make middlemen redundant," said president of the Association for Real-Estate Developers Umesh Pattnaik.

An official said that real-estate developers would have to register their new and ongoing projects with the newly formed authority by July 31, failing which they would not be able to sell their properties.

"The government should push back the deadline because the time is really less for everyone to register their projects," said Sangram Nayak, a real-estate developer.