New Delhi: Cabinet has approved the Real Estate Regulator Bill to prevent arbitrary and false claims by the builders while advertising and selling flats and houses. According to the bill, builders have to register all their projects with the state regulatory authority and must deliver the projects within the stipulated period.
There is also a provision of imposing heavy fine on the builders if they fail to keep up their promise. On the other hand the builders say that several provisions of the Bill are unjust and against their interests.
Buyers will also get a guarantee of one year guarantee on their new houses. It means that after possession of the house if there is any construction-related problem within one year, then the builder must carry out the repair on his cost. If the builder fails to do so, then the buyer is entitled to get compensation.
Normally the builders invest in other projects after taking money from the buyers of another project. But according to the new bill now the builder must keep 70 per cent of the money collected from the buyers of a project in a bank account and it can be withdrawn and used only for that project.
Under the approved bill, an authority will been setup for controlling real estate companies and builders must register all projects with it. Before announcing any new project, the builder must take the authority's permission. The builder must also pay compensation if any false information is given in the advertisement.
The authority can impose a fine if the builder fails to give possession within the agreed time period and must return money to the buyers with interest. If the builder fails to do so, then the promoter can be jailed for three years.
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