Union Cabinet approves Real Estate Regulatory Bill
New Delhi: A Bill providing for setting up a regulator for the real estate sector and having provisions like a jail term of up to three years for developers who make offences like putting up misleading advertisements about projects repeatedly was approved by the government Tuesday.
The Real Estate (Regulation and Development) Bill, approved by the cabinet, seeks to provide a uniform regulatory environment to the sector.
It also intends to make it mandatory for developers to launch projects only after acquiring all statutory clearances from relevant authorities.
Builders and developers who become repeat offenders may even face a jail term of up to three years.
The Bill makes it mandatory for builders to clarify the carpet area of the flat. This would be made uniform for the entire country. This rule would make the concept of super area - which is often used to mislead owners - virtually non-existent.
The Bill has provisions under which all relevant clearances for real estate projects would have to be submitted to the regulator and also displayed on a website before starting the construction, sources said.
The proposed legislation 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 penalty which may be up to 10 percent of the project cost and a repeat offence could land the developer in jail.
The Ministry of Housing and Urban Poverty Alleviation is working on bringing all projects under a single-window clearance. While the Airports Authority of India and municipal bodies have come on board, there are some objections from the Environment Ministry which are being looked into.
Ministry sources said 22 states had given their approval to the Bill while five states wanted certain amendments. These changes have been incorporated in the Bill cleared by the Cabinet today, sources said. Chhattisgarh is the sole state to still oppose the Bill.
Builders and developers will have to get all clearances - from title deed to project cost - cleared before construction begins. FAR (Floor Area Ratio) will also have to be specified clearly by the builder.
While the Regulator in the states will be appointed by the state governments, in Delhi the Urban Development Ministry will appoint the regulator. DDA is likely to be made the regulator in Delhi, sources said.
The Regulator will also be the appellate authority in cases of dispute. This will save the owners the hassle of running around to different authorities for redressal.
The developers will also have to specify the common area in the society. The term "apartment" has been specified in the Bill and will include the space to be provided for a garage.