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Cabinet nod to real estate regulator

New Delhi, June 4
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 issuing misleading advertisements about their projects repeatedly was approved by the government today.

The Real Estate (Regulation and Development) Bill 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 the authorities concerned.

Keeping builders on a Tight leash

  • The Real Estate (Regulation and Development) Bill makes it mandatory for builders to clarify the carpet area of the flat
  • All clearances for such projects will have to be submitted to the real estate regulator and displayed on a website before starting construction
  • Failure to do so for the first time will attract penalty up to 10 per cent of the project cost, while a repeat offence can land the developer in jail

Builders and developers violating norms 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. The rule would make the concept of super area (often used to mislead buyers) 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 say. The proposed legislation has tough provisions to deter builders from issuing misleading advertisements related to the projects.

Failure to do so for the first time will attract penalty up to 10 per cent of the project cost, while a repeat offence can land the developer in jail.

The Ministry of Housing and Urban Poverty Alleviation is working on bringing all projects under single-window clearance system. 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. Those changes had been incorporated in the Bill cleared by the Cabinet today, they said.

While the regulators in the states would be appointed by the state governments, the Urban Development Ministry would appoint the regulator in Delhi. The DDA was likely to be made the regulator in Delhi, sources said. The regulator would also be the appellate authority in cases of any dispute. PTI

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