CHENNAI: Developers failing to deliver housing projects on time may land in jail as per the draft rules for the real estate act released by the state government on Saturday. The act was passed by the central government in March 2016 and it was left to the state governments to frame rules under it.
The Tamil Nadu Real Estate (Regulation and Development) Rules, 2016, put out for public comments, also mandate registration of agents engaged in the realty sector.But, the rules do not address the vital issue of according single window approval for buildings, which developers opine could be an impediment in the successful implementation of the pro-consumer act in one of the country’s largest urbanised states.
Welcoming the draft, Confederation of Real Estate Developers’ Associations of India (Credai) Chennai president Suresh Krishn said there was not much difference between the state draft rules and the central draft rules for the act.“However, the draft rules have not addressed the single window clearance approvals for housing projects, which is essential for the successful implementation of the act,“ he said.
As per the draft rules, home buyers will get full refund at any time “if the builder has not followed the time schedule“. It also says developers must refund the buyer within 45 days once he fails to comply with the time schedule. The draft rules provides for constitution of a real estate authority and an appellate tribunal before which aggrieved consumers can represent their grievances. Default in repayment by promoters as per the orders of appellate tribunal is liable for prosecution under the Indian Penal Code. However, the offence can be compounded and offenders can be released from custody if 10% of the estimated cost of the real estate project (or plot in some cases) is paid as penalty. Further, it says, court proceedings cannot be initiated against the builder after he or she is set at liberty, in the light of penalty.
The promoter, the consumer or the real estate agent shall comply with the orders of the authority or appellate tribunal within the period specified by the court, which shall not be more than 30 days from the date of compounding of the offence.
Builders should also register their projects with the authority detailing all aspects of the project. The authority will also have an exclusive website, where profile and track record of promoters and litigations over their real estate projects would be uploaded. According to government sources, public can send their comments on the draft rules within 21days. “The rules will be notified after getting passed in the assembly ,“ an official told media, adding that “it is unlikely that the draft rules will be introduced in the ongoing session.“ The rules also state that promoter will have to pay a rate of interest of 2% in addition to the RBI’s repo rate (the rate at which the central bank lends money to banks).
It may be recalled that the centre unveiled draft rules for the Real Estate (Regulation and Development) Act 2016 to provide guidance for states to follow.
Credits ET Realty