Housing Ministry Plans Real Estate Regulator Introduction
The housing ministry is planning to introduce a real estate regulator in the Cabinet. The regulator is anticipated to curb illegal activities within the realty sector, providing a much-needed cleansing.
Maken to seek cabinet – approval of real estate regulator bill.
Regulating the Sector
The real estate sector could be in for a transformation if government establishes a real estate regulator to oversee the industry. This regulator aims to take a firm stance against any unscrupulous builders who engage in illegal practices and could face significant consequences.
The regulatory bill outlines stringent penalties for builders found guilty of misconduct, including potential jail time. The bill further restricts builders from advertising projects prior to obtaining regulatory approval.
Despite opposition from developers, the housing ministry remains committed to implementing the real estate regulator so as to protect buyers from unscrupulous practices. The bill seeks to be passed in the current parliament session.
Real estate regulator bill is expected to be presented in the cabinet.
Bill Introduction and Approval
On Sunday, Ajay Maken communicated that the bill will initially be introduced in the Cabinet. Following its approval, it will then be presented in Parliament.
This pro-consumer bill, having faced previous rejections from senior ministers and pending since 2009, now awaits implementation before the upcoming 2014 elections.
Protection for Home Buyers
By clearly defining the ‘Carpet area’, the legislation aims to eliminate the practice of developers exploiting buyers through inflated ‘super area’ calculations. Consequently, developers would be barred from selling units based on the super area.
A real estate regulator will be appointed in each state. All project developers must register each project with the regulator and they will be permitted to sell properties only after securing essential clearances.
Incomplete clearances represent one of the primary challenges that buyers face with developers. Therefore, the bill prohibits project advertising prior to registration with the regulator. Developers can only collect payments from buyers after obtaining all requisite approvals and permissions under the legislation.
Realty agents will also be required to register with the regulator. In addition, a buyer-builder agreement is being crafted to enhance clarity in property transactions.