Jail for fraudulent builders? |
The government of India has approved 20 changes in the Real Estate (Regulation and Development) Bill including a proposal for insurance of land title to protect buyers and developers from the risk of land fraud, a move which is seen to be pro-consumer.The legislation comes after a wait of nearly three years and is expected to help regulate the unorganized sector, plug loopholes and protect buyers by setting up regulators in each state. It has proposed a jail term up to three years or penalty or both in case of builders, one year for real estate agents and buyers for violating the orders of appellate tribunals. Another major change which is expected to benefit consumers is the condition of keeping 70% of the sale proceeds for a particular project in a separate account to meet the construction cost of that project, including the land cost. This has been done to minimize diversion of funds and ensure timely completion of projects.Moreover, the regulatory authorities can grade projects along with grading of promoters to help buyers make the choice while booking a property.In order to make states comply with the norms, the bill says states will have to make the rules within six months of notification of the proposed Act. Each state will establish the real estate regulator and the appellate tribunal as per the rules.
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