New Delhi: The government will soon introduce a bill to regulate the real estate sector and protect home buyers, Minister for Housing and Urban Poverty Alleviation Ajay Maken said here Sunday.
"We will take the Real Estate (Regulation and Development) Bill 2012 to the cabinet soon. We hope to pass it in the budget session," Maken told the national editors' conference here.
"Salaried people usually spend all their savings on buying an apartment but often suffer delays and cost escalation," he said.
According to the bill, no developer or builder would be able to start a housing project till he had obtained all the necessary clearances and submitted them as proof before a regulatory authority.
The bill would also mandate that no developer would be able to collect any money from the buyers till he got the permission to start construction on the project.
Also, the developer would have to deposit all the money collected from the buyers for a particular project in a separate bank account and would be allowed to use the funds only for that project.
"Developers sometimes use funds collected from buyers for a project to buy land for another project. This results in delays for the buyer," said Maken.
He also said the developers would not able to use pictures of housing projects in foreign countries to lure buyers while advertising their project.
"They will have to use pictures only of their actual project," said Maken.
The minister said the bill would provide a uniform regulatory environment to enforce disclosure, fair practice and accountability norms and fast track dispute resolution mechanism in real estate transactions.
"Around 10 percent of the project cost could be fined for the first violation and a second violation could invite a jail term," said Maken.