The building industry has responded positively to the proposal of the Union Ministry for Housing and Urban Poverty Alleviation to set up a regulator for the real estate industry.

The Model Real Estate (Regulation of Development) Act will get the building industry more organised and make the industry’s now unregulated operations more transparent, building industry sources said here.

Apart from the regulator, there will also be an Appellate Tribunal “to regulate, control and promote planned and healthy development and construction, sale, transfer and management of colonies, residential buildings, apartments and other similar properties,” according to the proposals.

The regulator will also host and maintain a website with all project details, to protect the public interest “in relation to the conduct and integrity of promoters and other persons engaged in the development of such colonies” and to facilitate smooth and speedy construction and maintenance of properties. The practical aspects of implementing the proposed Act include more or less uniform procedures for the building industry across the country, an industry source said. Currently procedures for obtaining building permits vary vastly from State to State.

The Act will make it mandatory for builders to register any development. If a property is not registered with the regulator it cannot be sold or transferred. Any complaint against the registered property developer will be examined and if the developer is found guilty the registration can be cancelled by the Regulator.

Advertisement or prospectus cannot be issued for sale of a plot or building that has not been registered with the Regulator. It will also be mandatory for the promoter (builder) to first file a copy of the advertisement with the regulating authority.

Advertisements should contain true statements and disclose all the details of the project. The builder or promoter will also have the responsibility to make all details accessible to the public. For this purpose, the onus has been put on the promoters for entering all the records and details of a project on the website of the Regulator. The onus for the veracity of the information in the public statements or advertisements rests with the builder. Any person wanting to withdraw from a project at any point, on finding that that information furnished was false, would be compensated fully. Similarly, the builder (promoter) cannot take any advance or deposit without first entering into an agreement of sale.

News Published Under:  The Hindu