New Delhi, Jun 4 : The Union Cabinet today approved the Real Estate Regulatory Authority Bill that seeks to set up a real estate regulator for the sector The law will cover any developer coming up with a project of 1,000 sq metres and above.
Two key features of the bill are: builders must register all projects with the state regulatory authority, and the need to adhere to the announced completion time-frame.
The Bill also makes it a punishable crime for builders coming out with misleading advertisements. It also makes it compulsory for property brokers to obtain a licence to conduct business.
The Bill iclearly defines ‘carpet area', and private developers will not be allowed to sell houses or flats on the basis of ambiguous ‘super area'.
After the bill is enacted, builders will be able to sell property only after getting all necessary clearances. This may address a major concern of buyers about builders not giving exact picture of land acquisition.
The Bill also prohibits developers from collecting any money from buyers before completing all necessary permits to start construction on the project.
The Bill also prohibits builders from using pictures of housing projects in foreign countries to lure buyers while advertising a project. They will have to use pictures reflecting the actual project, which will be delivered to home buyers.
The developers will have to maintain a separate bank account for a particular project, and will not be allowed to divert the money for other projects.
Some private developers have opposed the bill which seeks to provide a uniform regulatory environment to the sector.
According to provisions of the Bill, the regulator will act only if there is a complaint of any deviation from the project details disclosed by a developer.