The real estate regulation bill approved by the union cabinet will promote fair-play in real estate transactions and introduce penal provisions for developers who do not stick to norms, Housing and Urban Poverty Alleviation Minister Ajay Maken said Wednesday.
The bill, cleared by the cabinet on Tuesday, would be introduced in the monsoon session of parliament (July-August), Maken said, adding: "The bill aims at protecting the interests of consumers."
Maken told reporters here that the bill provides for a uniform regulatory environment and will help protect consumer interests and help in speedy adjudication of disputes.
The new real estate development authority will have the power to impose penalties for non-registration of projects, including imprisonment of up to three years for continuous violation and impose penalties in case of other contraventions.
Reiterating the government's commitment to make real estate development transparent and consumer friendly, the minister expressed the hope that the proposed legislation would ensure greater accountability towards consumers and significantly reduce frauds and delays.
The bill is also expected to promote regulated and orderly growth through efficiency, professionalism and standardisation. It seeks to ensure consumer protection without adding another stage in the procedure for sanctions.
It contains elaborate provisions dealing with registration of real estate projects and registration of real estate agents with the real estate regulatory authority.
The bill will bring about standardization in the sector leading to healthy and orderly growth of the industry through introduction of definitions such as 'apartment', 'common areas', 'carpet area', 'advertisement', 'real estate project' and 'prospectus'.
It will introduce the concept of using only 'carpet area' for sale as against the present super area and super built-up area and help curb unfair trade practices.
The bill makes it mandatory for promoters to deposit in a separate bank account at least 70 percent of the funds, or such percentage as decided by the regulatory authority in consultation with the appropriate government, to cover a project's construction cost.
