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The Union Cabinet today deferred considering a draft law to set up a regulator for the real estate sector with provisions for jail term for the developer for putting out misleading advertisements about projects.
“A decision on the real estate regulator Bill has been deferred,” a Union Minister said.
The proposed regulator also seeks to make it mandatory for developers to launch projects only after acquiring all the statutory clearances from relevant authorities.
It also has provisions under which 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.
The Real Estate (Regulation and Development) Bill seeks to provide a uniform regulatory environment to the sector.
The Bill has certain tough provisions 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.
The proposed Bill also seeks to make it mandatory for a developer to maintain a separate bank account for every project to ensure that the money raised for a particular task is not diverted elsewhere.
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