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Bill to bring transparency in real estate
Haryana government has passed the Haryana Regulation of Property Dealers and Consultants Bill, 2008 with the objective to check fraudulent and benami deals and provide succor to the common man who buys a house and are often duped by the unscrupulous developers and middleman. The bill that has been passed during the recently concluded Haryana assembly session relates to regulate the functioning of property dealers, property consultants and estate agents in order to protect the interests of buyer and seller using their services. After enforcement of this Act no property dealer, his representative partner or employee can function without obtaining a license. The opacity in the land ownership has always been the biggest stumbling block for international players to do business directly in the country. A large number of land ownerships are disputed and are involved in the legal suits.
The law that has been enacted by the Haryana assembly has made a broker involved in the transaction responsible for the genuineness of both the seller as well as the buyer. To an extent, it has also put onus on the broker to verify that the property involved in the deal is free from any legal issue. So far, a broker involved in a deal could not be made a party in a legal suit, in case; a dispute arises between a buyer and a seller, and the broker simply can wash his hands off from the transaction. But, the new law has specifically clarified that in case of dispute; the broker involved in the deal will stand witness. This will act as a big deterrent for the brokers to involve in a shoddy deal.
In fact, the state government has initiated a new era in the real estate sector, which other state should also follow. In fact, the Union Urban Development Ministry has drafted a similar legislation to contain real estate players in Delhi way back in 2006. But the bill is still to be passed in the parliament. A similar bill in other states is also the demand of the hour to protect the hard earned money of common man. In fact, Haryana Regulation of Property Dealers and Consultants Bill, 2008 is a beginning of the government’s effort to regulate the sector. At present, brokers and developers used to form a nexus to cheat public on the issues of after sale service to be provided by developers. Developer claims that the broker had overpromised them without his consent. The enduser had no legal recourse, as brokers are not involved directly in the deal.
The bill also stipulates a harsh provision for punishment if a person is found guilty of violating the law. A person, who violates a provision of this act or any rule made under this act, will be punishable on first conviction with imprisonment and with fine, which may be extended up to Rs 50,000 in the first conviction. The fine will increase to Rs one lakh and Rs1.5 lakh in the event of second and subsequent conviction for the violation. Interestingly, property dealers and real estate consultants have welcomed the move, as it would legitimize the broking business. At the same time, it will keep away the less serious players from the business.
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