Cabinet clears real estate bill, defers discussion on food security bill
04 June 2013
The union cabinet today cleared the Real Estate Regulator Bill, which seeks to empower homebuyers and prescribe strict penalties on builders who cheat customers.
The cabinet, however, opted to defer a decision on the Food Security Bill, saying it will be discussed on Friday as demanded by opposition parties.
With differences of opinion within the ruling UPA and opposition Bhartiya Janata Party, the Congress is reported to be looking to push through an ordinance to save the food security bill.
The Real Estate Regulator Bill, which has been vigorously opposed by the real estate sector, contains provisions for jail terms to developers who cheat buyers.
Also, builders will not be allowed to divert money paid by homebuyers to other projects.
The bill also provides for a refund if a project is delayed. Under the proposed new law, builders will be able to sell property only after getting all necessary clearances.
The bill requires developers to provide all relevant clearances for real estate projects to the regulator and also display them on a web site before starting construction.
The legislation also has tough provisions to deter builders from putting out misleading advertisements.
Failure to comply with the requirements would attract a penalty, which could be up to 10 per cent of the project cost for the first time and repeat offence could land the developer in jail.