The numerous accounts of property buyers being duped by real estate agents and brokers are well known to all. In order to avoid these scenarios, the center is planning to make it mandatory for real estate agents to register themselves with proposed Real Estate Regulatory Authority (RERA). Further contemplation is being done on the extension of rights and purview of RERA to commercial properties in addition to Residential properties.
This bill that was proposed by the last UPA government covered only residential areas. Additionally, it proposed that real estate developers register themselves with the organization. However, the recent government has made a few proposals to increase the benefit of this organization. The bill is expected to be approved soon after which a cabinet will be moved.
Proposals were also made to bring small builders, working on projects on plot sizes less than 1000 sq. meters, under the committee's purview. However, these proposals were rejected as it would put increased pressure on small builders to provide a host of details and documents to the regulator including building layout plan, project timeline and cost analysis, sale agreement about to be registered with prospective buyers, etc. However, these documents will be required to be submitted before the project was launched or advertised. A failure to do so was supposed to incur a punishment of maximum three years of imprisonment and upto 10% of total project cost. However, the aforementioned proposal was rejected by the ministry though there exists growing concern that exclusion of small builders could lead to exclusion of a large number of projects.
Additionally, any violation, on the part of the builder, from the obligations mentioned in the contract can lead to an imprisonment of 1 year or a fine of around 5% of the project's total cost.
However, the bill is not completely one sided. It also protects developers by imposing fines on buyers who default on payment.