BUILDERS
TO FACE REALITY CHECK AS GOVT PLANS REALTY BILL
People stacking away their hard-earned savings to buy their
dream houses will soon get protection from those shady real
estate builders. The urban development ministry is putting the
finishing touches to a Real Estate Management (Regulation &
Control) Bill which is to serve as a model legislation for the
country. A proposed Delhi Real Estate Developers Bill is also
to follow.
Builders will now
be required to register themselves with a mandated government
authority.
According to sources
offering a sneak preview of the Bill, educational qualifications
are to be a prerequisite for the registration of a builder
or promoter. The new guidelines insist on a degree in engineering,
architecture, town planning, law, real estate management or
the equivalent in order to obtain a registration certificate.
The promoter/ builder
has to be financially strong, with demonstrable credit worthiness.
The guidelines
further state that if the builder/ promoter fails to obtain
completion and occupancy certificates, it is for the government
to authorise the competent authority to obtain these certificates
and recover the charges from the promoter/ builder.
In states like
West Bengal and Punjab, about 20% of the development cost
is paid to the state government as a bank guarantee (BG).
In the new scheme of things, the estimation of the development
cost as well as the percentage to be fixed as a BG will be
left to the discretion of the state government.
Industry associations
like Assocham, Ficci and PHDCCI have been recommending the
constitution of such a Bill on the grounds that a few unscrupulous
builders and fly-by-night operators bring disrepute to the
entire builder community. Some provisions of the Indian Penal
Code (IPC) and Consumer Protection Act are the only existing
legislations that pertain to real estate at present.
Earlier attempts
at providing guidelines for registration pertained to the
drafting of an Engineers Bill for the registration of engineers
in India. This failed to take off following a turf war between
the HRD ministry and the urban development ministry after
the latter was recommended as the nodal agency for implementation
of the Bill.
Work on a draft
legislation for regulating the activities of private builders/
promoters and real estate agents engaged in the construction
and promotion of the real estate and housing business in the
National Capital Territory (NCT) of Delhi is also in process.
