A bill seeking to protect home buyers from unscrupulous developers and builders and having provisions like jail term of up to three years for offences like putting up misleading advertisements about projects repeatedly, was introduced in Rajya Sabha on Thursday.
The bill also intends to make it mandatory for developers to launch projects only after acquiring all statutory clearances from relevant authorities. It makes it mandatory for builders to clarify the carpet area of the flats as well.
Introducing the Real Estate (Regulation and Development) Bill 2013, Housing Minister Girija Vyas said the bill seeks to establish the Real Estate Regulatory Authority to protect the interest of consumers in the real estate sector.
Ms. Vyas also said the bill is for regulation and promotion of the real estate sector and to ensure sale of plot, apartment of building, as the case may be, in an efficient and transparent manner.
The bill will also facilitate the establishment of an Appellate Tribunal, which will hear appeals from decisions, directions or orders of the Authority and related matters.
The Union Cabinet had approved Bill on June 4. Under the bill, there will be a model builder—buyer agreement which is expected to reduce ambiguities in real estate transactions.
Real estate agents will also be asked to register with the regulator, a move that is expected to help in curbing money laundering. The bill that seeks to provide a uniform regulatory environment to the sector, was earlier opposed by private developers but the government stuck to it on the argument that it will infuse transparency.
It has provisions under which all relevant clearances for real estate projects would have to be submitted to regulator and also displayed on a website before starting construction.
The bill has tough provisions to deter builders from putting out misleading advertisements related to the projects carrying photographs of the actual site. Failure to do so for the first time would attract a penalty which may be up to 10 per cent of the project cost and a repeat offence could land the developer in jail.