Safety net for home buyers?

New Delhi, Oct. 4: The Centre is ready with the final draft of a real estate bill that makes it compulsory for developers to disclose key aspects like carpet area and layout and promises a safety net for prospective home buyers.
If the Real Estate (regulation and development) Bill, 2011 is cleared, developers can even be jailed for up to three years for making false promises to customers, many of whom invest their life's savings for a place they can call their own.
The jail term could be in addition to a penalty of 10 per cent of the total project cost.
The proposed law envisages a real estate authority to regulate all developers and real estate agents. All developers will have to register with the authority, the first such body in the sector.
The draft, which The Telegraph has accessed, has been sent to the law ministry. Once cleared by the ministry, it will be presented to the cabinet before it is tabled in Parliament.
The proposed act says developers have to disclose the carpet area, layout plan of the proposed apartments, structural design and plans for other on-site development. Builders cannot change plans or insert charges after the sale agreement is in place.
The draft says developers will have to upload on the proposed authority's website all certificates and details that can be accessed by any future customer. "The act will bring a sea change in access to information that buyers have at present. The regulatory authority's website will act as an interface between buyers and developers," said an official with the ministry of housing and urban poverty alleviation, the nodal ministry.
Developers cannot float fancy advertisements to attract buyers. If there is any deviation from the ad, the promoter has to compensate the buyers for any loss because of the false information. If a builder pulls out of a project, the money has to be returned with interest at not more than the prevailing market rate.
The bill also addresses the problem of disputed property. Since there have been cases where developers have used such property to build multi-storeyed apartments at attractive rates, the bill stipulates "full and true disclosure" of the nature of the title of the land to be developed.
If the land is owned by any other party, the developer has to upload the agreement with that party.
Under the draft law, developers cannot publish advertisements till projects are registered with the regulatory authority or force buyers to pay an advance without the sale agreement.
If there are any "structural defects or deficiencies" in a building within "a year of allotment", they will have to be "rectified by the promoter".
The bill envisages an appellate tribunal, to be headed by a retired Supreme Court judge or a retired high court chief justice. The tribunal can start investigations on its own if it receives a complaint of violation.

For those planning to buy homes, this may be good news provided the law is implemented properly.
We have many laws against corruption which have failed to curb the menace because of poor implementation as the the law makers and the perpetrators of corruption were the same. Here too they are the same.