Builders flout­ing law may face three-year jail

Consumer Voice - - In The News -

The govern­ment has ap­proved sev­eral changes in the Real Es­tate (Regulation and De­vel­op­ment) Bill in­clud­ing a pro­posal for in­sur­ance of land ti­tle to pro­tect buy­ers and de­vel­op­ers from the risk of land fraud. The leg­is­la­tion is ex­pected to help reg­u­late the un­or­gan­ised real es­tate sec­tor, plug loop­holes, and pro­tect buy­ers by set­ting up reg­u­la­tors in each state. It has also pro­posed a jail term of up to three years or penalty or both in case of builders, and one year for real es­tate agents and buy­ers for vi­o­lat­ing the or­ders of ap­pel­late tri­bunals.

An­other ma­jor change that is ex­pected to ben­e­fit con­sumers is the con­di­tion of keep­ing 70 per cent of the sale pro­ceeds for a par­tic­u­lar pro­ject in a sep­a­rate ac­count to meet the con­struc­tion cost of that pro­ject, in­clud­ing the land cost. This has been done to min­imise di­ver­sion of funds and en­sure timely com­ple­tion of projects. More­over, the reg­u­la­tory au­thor­i­ties can grade projects along with grad­ing of pro­mot­ers to help buy­ers make the choice while book­ing a prop­erty.

In or­der to make states com­ply with the norms, the bill says states will have to make the rules within six months of no­ti­fi­ca­tion of the pro­posed Act. Each state will es­tab­lish the real es­tate reg­u­la­tor and the ap­pel­late tri­bunal as per the rules. The tri­bunal will be the fi­nal ar­biter in case of dis­putes be­tween a buyer and builders or pro­mot­ers. Ei­ther party can ap­proach the tri­bunal if the dis­pute is not set­tled by the real es­tate reg­u­la­tor.

Be­sides, the con­sumer has the op­tion to ap­proach con­sumer fo­rums at district level in­stead of only the reg­u­la­tory au­thor­i­ties pro­posed to be set up un­der the bill for re­dres­sal of griev­ances. Not only this, to en­sure that the reg­u­la­tory au­thor­i­ties do not de­lay cases, the bill has a pro­vi­sion for dis­pos­ing of com­plaints in 60 days—no such time limit was in­di­cated in the ear­lier bill. Sim­i­larly, the ap­pel­late tri­bunals need to ad­ju­di­cate cases in 60 days as against 90 days as pro­posed ear­lier.

Ac­cord­ing to the changes, the li­a­bil­ity of pro­mot­ers for struc­tural de­fects has also been in­creased to five years from the ear­lier pro­vi­sion of two years. An­other ma­jor change ap­proved by the Cab­i­net in­cludes equal rate of in­ter­est to be paid by pro­mot­ers and buy­ers in case of de­fault or de­lays. More­over, to fast-track the projects, the pro­posed bill has in­cluded a sec­tion for pro­mot­ing a sin­gle-win­dow sys­tem of clear­ances for real es­tate projects by reg­u­la­tory au­thor­i­ties. It also says that the al­lot­tees shall take pos­ses­sion of houses within two months of is­suance of oc­cu­pancy cer­tifi­cate.

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