The Hindu Business Line : Law to regulate realty

The Ministry of Housing and Urban Poverty Alleviation has sought feedback from the public, officials and industry on the draft model Real Estate (Regulation of Development) Act, according to an official press release.

The feedback on the provisions in the proposed law, the draft of which is available on the Ministry's website www.mhupa.gov.in, can be given within 45 days.

The objective is to provide guidelines for the establishment of a regulatory authority and appellate tribunal at the State level to streamline realestate transactions.

The authorities will regulate, control and promote planned and healthy development and construction, sale, transfer and management of colonies, residential buildings, apartments and other similar properties. Also, project details will be made available on a specific website for public information and transparency.

COVERING ALL ASPECTS

The draft has seven chapters that deal with regulation of development of colonies and promotion of construction, sale and transfer of residential buildings, apartments and other similar properties, role of promoter, real estate regulatory authority, appellate tribunal, offences and penalties and items such as court jurisdiction.

The regulatory authority will consist of a chairperson who has held the rank of Principal Secretary to the State Government or an equivalent post at the Centre and two members who are experts in public administration, urban development, finance, law or management. The appellate authority will also have two members headed by a chairperson who has held the post of a judge of the High Court.

ACCOUNTABILITY

The proposed Act provides for stiff penalties, including fines and imprisonment, for those contravening it. Developers will have to statutorily register their projects with the regulatory authority.

But projects with less than four apartments or smaller than 1,000 sq.m are exempted from this provision.

For registration, the developers or promoters will have to furnish a bank guarantee equal to 5 per cent of the estimated cost of the development.

The registration is valid for three years with provision for a maximum of two annual renewals.

The proposed Act also dictates the responsibilities of the seller and the buyers. The promoter has to make available to the buyers the documents and information relating to the project, including sanction details, registration with the authority, project details and nature of title to the property.

The promoters also cannot proceed with the transaction or advertise the project without first registering with the regulatory authority.

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