New Law to benefit home buyers

Registration of builders, adherence to approved plans and refund of money in cases of default will become mandatory under a new law that the Government plans to bring in to usher in “accountability and transparency” in land selling and housing transactions.

A Real Estate Regulatory Authority will also be established under the Real Estate (Regulation and Development) Bill, 2011, whose draft was made public by Union Minister for Housing and Urban Poverty Alleviation Kumari Selja here.

Once the law comes into force, no promoter or builder will be able to develop any immovable property without registering the real estate project and obtaining a registration certificate from the proposed authority.

“The Government of India has been planning such a legislation for a very long time and real estate sector and others have approached me on a number of occasions on such kind of a law. The aim is to intervene and ensure transparency and accountability on part of the promoter to the consumer,” Selja told a press conference.

The Minister has also written a letter to Chief Ministers enclosing a copy of the draft bill seeking their views on the legislation.

The proposed law also has a provision asking the promoter to compulsorily deposit a portion of funds received from the allottees in a separate bank account, to be used for that project only.

Once the promoter registers his project, the firm will be asked to open an online account through which all the necessary documents will have to be sent to the authority, which will further verify them.

Under the scheme, she said, the Government will provide credit guarantee support to collateral-free/third-party- guarantee-free housing loans up to Rs 5 lakh extended by lending institutions for low income housing.

Source – Agencies

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