Recommends Provisions To Promote Honest Developers
A parliamentary panel looking into the real estate bill has recommended penalty for defaulting realtors and even jail term of up to three years for repeat offenders. The committee has also recommended several amendments to protect consumers including the provision of interest payable by both allottees and the developers to be the same in case of any default by either party , something that will make the transaction more equitable.
Reinforcing the existing penal provision of the NDA 's bill, the select committee has also recommended that the violation of orders of the appellate tribunal by developers should be treated as a “serious offence“ and the penal provisions are inadequate. The present bill provides for imprisonment up to three years and or with fine up to 10% of the project cost. Similarly, if a real estate agent fails to comply with the tribunal's order, he can face imprisonment up to one year or with fine up to 10% of the cost of plot or apart ment. The panel in its report has mentioned that there was difference of opinion among the members regarding im prisonment and a few had sought deletion of the jail provision and reducing penalty up to only 2%. But these were rejected by the committee.Committee chairman Anil Madhav Dave said the recommendations aimed at making a law that will “promote good builders, punish errant ones“. The bill envisages setting up of a regulator for the realty sector.
In order to bring parity between developers and home buyers, the committee said, “The interest rate payable by the promoters as well as by allottees shall be same in eventuality of any default by either of them.“ At present, while developers pay only 2%-4% interest in case of their default, the consumers are made to pay as high as 16%-18% interest for their default. This has been the main reason behind huge number of home buyers dragging the developers to courts.
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