The Union Cabinet is likely to consider a Bill to set up a regulator for the real estate sector on Tuesday. The Real Estate (Regulation and Development),Bill 2013,seeks to make it mandatory for developers to launch projects only after acquiring all the statutory clearances from relevant authorities.
Builders,with project plot size of 1,000 square metres and above,would be mandated to compulsorily register their projects with respective regulators,the details of which would be displayed on their websites before starting the construction.
The legislation has provisions under which developers will have to deposit about 70 per cent of the total money collected from buyers in a scheduled bank to be spent exclusively for the projects.
It also seeks setting up of a real estate appellate tribunal for adjudicating disputes. The tribunal will be headed either by a sitting or a retired judge.
While the bill seeks to make it mandatory for developers to launch projects only after acquiring all the statutory clearances from relevant authorities,it also proposes stringent actions to deter builders from putting out misleading advertisements related to the projects with punishment ranging from imprisonment of up to one year to de-registration of projects. It also suggests setting up of a national advisory council to be headed by housing minister Ajay Maken to suggest ways to advise the regulator on crucial matters.
Buyers who have paid advance deposits on the basis of advertisements and have sustained any loss or damage due to incorrect statement would have to be compensated. The developers have to refund his entire money along with interests or as recommended by the proposed regulatory mechanism.