Centre planning to set up real estate regulator: Maken

• Builders can launch projects only after acquiring all statutory clearancesA
• Action against developers for misleading advertisements
• Offenders to face penalty and even jail in some cases

The proposed Bill also seeks to make it mandatory for a developer to maintain separate bank account for every project to ensure that money raised for a particular task is not diverted elsewhere New Delhi (PTI): The Union government plans to set up a tough regulator for the real estate sector with provisions for even jail term for the developer for putting out misleading advertisements about projects. The proposed regulator will also make it mandatory for developers to launch projects only after acquiring all the statutory clearances from relevant authorities, Minister for Housing and Urban Poverty Alleviation Ajay Maken said at the National Editors' Conference here. He said all relevant clearances for real estate projects would have to be submitted to the regulator and also displayed on a website before starting the construction. Maken said a proposal for the Real Estate (Regulation and Development) Bill, which seeks to provide a uniform regulatory environment to the sector, would be brought before the Union Cabinet soon. The Bill has certain tough provision to deter builders from putting out misleading advertisements related to the projects carrying photographs of actual site. Failure to do so for the first time would attract a penalty which may be up to 10 per cent of the project cost and a repeat offence could land the developer in jail, Maken said. The Bill also has provisions that seek to clearly define a carpet area for an apartment, thus barring the developer from making any announcements regarding a "super-duper carpet area", he said. The proposed Bill also seeks to make it mandatory for a developer to maintain separate bank account for every project to ensure that money raised for a particular task is not diverted elsewhere, Maken said. Maken said the developer will also have to specify an outer time limit for completion of the project to the regulator. The agreements that the developer sign with buyers will also be required to be vetted by the regulator as the buyer may not have the capacity to interpret the fine print of such documents, he said. The developers, property dealers and agents will have to register themselves with the regulator, Maken said. For the developers, the ministry plans to formulate a single window system for clearance of Real Estate Projects throughout the country, which was expected to bring down average approval time from 196 days to 45-60 days, Maken said. Apart from other things, the process involved developing of Single Composite Application Form (CAF) which entailed seeking and getting permissions from the Municipal, State and Central Government agencies simultaneously. On the new initiatives, Maken said the Ministry had decided to frame and formulate a Slum Upgradation Index for monitoring periodically the upgradation of slums. This index will reflect the trend in the growth of slums and their characteristics for a period of time, he said, adding that the Ministry has decided to set up a High Power Committee to suggest methodology for developing the index.