In a bid to ensure fair practice in realty business, the Union Cabinet on Tuesday approved amendments to the long-pending real estate bill to bring under its ambit commercial and all ongoing projects as also brokers, while safeguarding consumers.
While the Bill already provides for strict penalties including jail for errant builders, the amendments seek to make it mandatory for all developers, including of housing projects, to keep minimum 50 per cent of funds collected from buyers in a escrow account to meet the construction cost.
Through the amendments to the Bill of 2013, the Cabinet has extended the applicability of the Bill to commercial real estate also. Ongoing projects that have not received Completion Certificates have also been brought under the purview of the Bill and such projects will need to be registered with a proposed regulator within 3 months.
Another major modification is that promoters will not be allowed to change plans and structural designs without the consent of 2/3rd of consumers of a project, according to an official statement.
Real estate brokers also have been made punishable for non-compliance of orders of regulatory authority. Appellate Tribunals will also be set up under the proposed law.
Under the other new stipulations approved by the Cabinet, states have to make rules in this regard within one year. Adjudicating officers will have rank equivalent to that of District Judges.