Thursday, 18 June 2015

New law will protect property buyers from fraud developers

There's some good news for property buyers who are apprehensive of being cheated by private builders, developers and housing societies using forged documents, through false promises or by not having the required approvals. The Karnataka government plans to set up a new regulatory framework for the property market, to weed out fly by night developers and housing societies through a new legislation. With this, property buyers can look forward to transparency, understand the status of projects and check documents with a common regulator before buying their dream house. The proposal comes against the backdrop of several families losing their houses in the recent demolition drive in Bengaluru.

"We have decided to formulate a new bill by amalgamating some provisions of the Karnataka Land Revenue Act and Karnataka State Cooperative Societies Act to prevent developers and housing societies from cheating gullible people," said law minister TB Jayachandra.

At the moment, property projects are approved at various levels by different agencies such as the BDA, BBMP, BMRDA and pollution control board. The proposed bill seeks to eliminate this by seeking compulsory registration of projects and making developers meet all requirements, put up all approvals and furnish information on sale proceeds and available inventory to the regulator. The bill will incorporate mandatory disclosure clauses, which would provide buyers greater clarity on the project standards and timelines for completion.

Sources said the bill will be more on the lines of the Real Estate (Regulation and Development) Bill, 2013, of the Centre, which is before a parliamentary committee now. "The legislator will provide considerable relief to the ordinary buyer and investor, who goes through innumerable obstacles when buying a property and at times is duped by even small developers, builders and housing societies," a senior official of the urban department said.

D Satya Murty , additional chief secretary , urban development, said though there are already enough laws in place to regulate private developers and housing societies, there is a mafia out there to cheat innocent people.

Developers, however, are not amused as they fear facing new hurdles and more complex, timeconsuming processes. "One more legislation will only add to the confusion. Instead, the government should look to implement the existing laws which are good enough to regulate developers and safeguard the interest of property buyers," said Suresh Hari, secretary, Credai, Bengaluru.

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