The Real Estate barons are in a tizzy. High rates for seed money, no buyers, huge inventories pilling up and so many other problems.
The New draft bill released for public viewing on 11th Nov 2011, will increase the sweat beads on the forehead of every builder.
The Govt, aims to bring in more transparency and accountability in this industry notorious for widespread corruption, and the channeling of black money.
The Real Estate (Regulation and Development) Bill, 2011, is likely to be tabled in the parliament in the winter session, begins Nov 22 and ends Dec 21 and hope for cabinet clearance in the weeks to follow
Because of the opaque and outdated regulations, consumers generally suffer as they are not able to enforce accountability against the builders. The proposed regulation would protect the interests of consumers without hurting the real estate industry growth.
Some of the biggest new features of the proposed regulation, is that it will be mandatory for all developers and builders, who intend to sell any immovable property, to
1) register with Real Estate Regulatory Authority an industry watchdog that will keep a lease on land sharks and fly-by-night operators in their respective state. This will be applicable for all projects except for when the area of the land being developed does not exceed 4,000 sq mt.
2) The developers will need to make public disclosures related to land title, project completion date and other relevant scheme details on the website of the proposed regulatory authority. The disclosures must be made before launching a project. No builder will be allowed to issue or publish an advertisement or prospectus or start booking of flats in a project without obtaining registration from the authority.
3) that builders may be asked to set up a separate escrow account to compulsorily deposit 70% of the funds received from buyers and to ensure that these funds are used for that real estate project only.
4) The builders will also have to refund moneys in cases of default. "If the developer willfully fails to comply with the norms they shall be punishable with imprisonment for a term of up to three years or a penalty which may extend to a tenth of the estimated cost of the real estate project, or both," the bill says.
The Real Industry estate fears that now a new layer of sanctions would be needed and this would automatically become a new breeding ground of further corruption.
Builders have been up in arms against the imprisonment clause and also fear that it can be misused and heavy financial penalty is more than enough
Will this Landmark bill actually deliver what it sets out to do... namely clean up the Real Estate industry.
A fine balancing act is needed, so that while it supports the end user in getting a fair deal, it definitely does not want to trottle the real estate industry
The New draft bill released for public viewing on 11th Nov 2011, will increase the sweat beads on the forehead of every builder.
The Govt, aims to bring in more transparency and accountability in this industry notorious for widespread corruption, and the channeling of black money.
The Real Estate (Regulation and Development) Bill, 2011, is likely to be tabled in the parliament in the winter session, begins Nov 22 and ends Dec 21 and hope for cabinet clearance in the weeks to follow
Because of the opaque and outdated regulations, consumers generally suffer as they are not able to enforce accountability against the builders. The proposed regulation would protect the interests of consumers without hurting the real estate industry growth.
Some of the biggest new features of the proposed regulation, is that it will be mandatory for all developers and builders, who intend to sell any immovable property, to
1) register with Real Estate Regulatory Authority an industry watchdog that will keep a lease on land sharks and fly-by-night operators in their respective state. This will be applicable for all projects except for when the area of the land being developed does not exceed 4,000 sq mt.
2) The developers will need to make public disclosures related to land title, project completion date and other relevant scheme details on the website of the proposed regulatory authority. The disclosures must be made before launching a project. No builder will be allowed to issue or publish an advertisement or prospectus or start booking of flats in a project without obtaining registration from the authority.
3) that builders may be asked to set up a separate escrow account to compulsorily deposit 70% of the funds received from buyers and to ensure that these funds are used for that real estate project only.
4) The builders will also have to refund moneys in cases of default. "If the developer willfully fails to comply with the norms they shall be punishable with imprisonment for a term of up to three years or a penalty which may extend to a tenth of the estimated cost of the real estate project, or both," the bill says.
The Real Industry estate fears that now a new layer of sanctions would be needed and this would automatically become a new breeding ground of further corruption.
Builders have been up in arms against the imprisonment clause and also fear that it can be misused and heavy financial penalty is more than enough
Will this Landmark bill actually deliver what it sets out to do... namely clean up the Real Estate industry.
A fine balancing act is needed, so that while it supports the end user in getting a fair deal, it definitely does not want to trottle the real estate industry