In what may bring relief to housing aspirants across the country,
chances of home buyers being cheated by reality companies might be minimized as
the proposed real estate regulator will not only be empowered to penalizeerrant developers by imposing fines but also recommend imprisonment upto three years
if they are found guilty. The information, to be posted on the regulator's
website, will also mention the names of blacklisted developers.
For any housing project exceeding 1,000 square meters or four
apartments, the builder will have to procure a registration certificate from
the regulator after furnishing all relevant project details and permissions
from the competent authorities. This includes the number and size of plots,
layout plan, carpet area and plinth area of the flats or apartments and the
facilities provided. A project cannot be marketed or advertised without the registrationcertificate. The government has prepared a draft of the model Real Estate Bill,
and has invited views of all stakeholders by November ahead of giving it a
final shape.
Safeguarding the interests of buyers, the regulator makes it
mandatory for the developer to enter into a sales agreement ahead of taking the
deposit from a potential buyer and to provide stand-in warranty for the project
for two years after handing over the possession for any construction relatedproblems. Any buyer wishing to quit the project due to delays or false promises
shall be returned the entire investment along with interest at the existing
rate. Briefly, the Real Estate Regulator can [i] penalize errant developers by imposing
fines if they are found guilty [ii] recommend imprisonment of up to 3 years,
[iii] post names of blacklisted developers on its website; and [iv] order
return of the entire investment along with interest at the existing rate if abuyer quits the project due to delays or false promises.
The builder or promoter of the project will have to submit a
timeline for providing various civic services like supply for electricity and
water, sewerage and drainage systems, lifts and fire-fighting equipment. Value
of cost escalation in projects, if any, will have to be arrived at by mutual consentbetween promoter and buyer. The names and addresses of all middlemen or brokers
will have to be maintained on the website. In case the developer fails to
provide any of the services listed at the time of purchase, he will be asked to
compensate the buyer.
The builder shall furnish a bank guarantee equal to fiveper cent of the estimated cost of the development works to a competent authority,
which may discharge it on recommendation of the regulator. The promoter will
have to obtain an insurance policy for at least five years after the
construction activity is complete for apartments against loss or damage by
natural calamities for the cost of replacement of such property and loss of
life and bodily injuries suffered by persons occupying the apartments.
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