There are many frauds like fake promises, project delay, deviation from approve plan, cheating over titles &
conveyance, rental returns trap, untimely approvals, hidden charges, formation of project based company to reduce liability / legal issue etc. by the builder lobby, were in the life time earning of a common person has been eaten by them. Common man is not so powerful to fight against the powerful builder lobby.
Realizing the need to regulate this unregulated sector and to protect those buying homes from being conned by real estate developers, the Union Cabinet on 7th April 2015 approved the Real Estate (Regulation and Development Bill).
- The Bill applies on both commercial & residential projects.
- The Bill provides for mandatory registration of all projects and real estate agents who intend to sell any plot, apartment or building with the Real Estate Regulatory Authority.
- It makes mandatory the disclosure of all information for registered projects like details of promoters, layout plan, land status, schedule of execution and status of various approvals.
- The Bill also seeks to enforce the contract between the developer and buyer and a fast track mechanism to settle disputes.
- Developers need to put aside 50 percent of the proceeds of a particular project in a bank account according to the Bill. This will prevent developers from diverting funds meant for construction and ensure timely completion of projects.
- The Bill also includes a condition that prohibits a developer from changing the plan in a project unless 2/3rd of the allottees have agreed for such a change. Minor additions or alterations will, however, be permissible due to architectural and structural reasons.
- The Bill has provisions for tough penalty for putting out misleading/deceptive advertisements about projects. For first time offenders, the penalty could be as high as 10 per cent of project costs. For repeat offenders, there could be a jail term of up to three years.
- The Bill makes it mandatory for builders to define “carpet area”. Currently, most developers sell property citing “super built-up area,” which is 25-40 per cent more than the actual usable area.