Real estate regulator Bill to Be in Action by Winter

September 11, 2009	(Be the first to rate this story!)  Loading ...
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The draft for the ambitious real estate regulation bill, aimed at facilitating growth and promoting a transparent, efficient and competitive real estate market in the country, is being finetuned by the government, it is learnt. The final draft bill is expected to be ready for submission by the winter session of Parliament. The government is keen to introduce a system of rating for builders and developers through the bill.

The move is expected to help improve transparency of their operations, and in turn help the beleaguered sector regain the confidence of financial institutions and potential customers. “Ratings in the realty sector are meant to inculcate business ethics in product development and delivery as evolving a rating system will bring customer focus and help in building a brand image. The rating of a project or developer builds confidence by ensuring that a reasonable quality product is delivered in a specified time and within the specified price range,” Kumari Selja, housing and urban poverty alleviation minister, said at an event organised by Assocham.

A source said the ratings would be based on a developer’s financial strength in terms of turnover, liquidity and profitability, scale of operations, intellectual expertise based on the qualification and experience of the management team, and past performance. The final ratings arrived at then would be updated on the website of the regulator.

Also, once the real estate watchdog in operation, a developer would need to provide the nature of title to the land on which the project is constructed and take necessary approvals prior to start of construction or marketing of the project to ensure that sums of moneys collected for a particular project are utilised towards fulfilment of all obligations of the project. In case ratings fall below a specified benchmark, the developer will be issued a show cause notice, and where the response is found unsatisfactory, the registration of the practitioner will be revoked, the source said.

Significantly, if the Bill is passed, real estate brokers would be required to obtain a licence for performing business, which could help curb speculative buying. The minister said the proposed Bill has been delayed already and could be passed by late November or December. The housing ministry is also looking to set up a high powered committee to examine the possibilities of creating micro-finance institutions to provide loans to developers and end buyers, sources said.

News Published Under:   Real Estate India, Real Estate Trends |

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