People waiting to get possession of their houses may get is sooner than expected, the housing ministry went ahead and said okay to tougher builder norms and accepted the parliamentary committee recommendation on the real estate bill that prohibits developers from diverting more than 50% of money collecting from the buyer to other projects.
The ministry also said that the panel recommendation to empower the state governments to impose stricter guidelines for the developers and see that the developers are not going against the norms, the housing ministry has accepted and agreed to all the recommendations made by the panel, comprised of 21- member select Rajya Sabha committee.
The ministry will go to the cabinet very shortly to the cabinet to get the changes approved so that the bill is presented in the parliament in the winter session. One important recommendation that was accepted is a provision that all projects over 500 sq mt must be registered with the proposed real estate regulator. Earlier the provision was for 1000 sq mt. The interest rate paid by the developer in case of default however stays the same. Real Estate observers and experts feel that these recommendations will go a long way to protect the home buyer`s interest and will further give a boost to the industry and encourage investments.
The government in turn will have to see that the projects are not stuck up in red tape and there are no unnecessary harassment and delay for the developer. This bill which was in cold storage since 2009 covers both residential and commercial projects and there is also a proposal to set up a real estate regulator. Developers will have to submit all the details of their projects like plans, project delivery time schedule, and status of all the mandatory approvals required etc.
If the developer fails to comply with these guidelines there would be a penalty of 10% of the total cost of the project. If the developer violates these guidelines again there would be again a penalty of 10% of the project cost and there could be a jail sentence for the developer.
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