Chennai: Union urban development minister M Venkaiah Naidu warned last week of penal action against realtors dishonouring their promises. But it’s not just builders who face punitive measures under the new Real Estate (Regulation and Development) Act. The ambitious legislation, which came into effect on May 1 across the country, also deals with plot promoters. The act is yet to be enacted in Tamil Nadu as the state government has not ratified the draft rules.
The act refers to a plot promoter as “a person, who develops land into a project, whether or not the person also constructs structures on any of the plots, for the purpose of selling to other persons all or some of the plots in a project, whether with or without structures thereon.” This apart, real estate agents who facilitate sale or purchase of plots, marketed by promoters are also under the purview of the act. Like builders, plot promoters also must register their layouts with the real estate regulatory authority before launching their projects in the market.
Realtors said that including plot promoters would ensure that they do not deviate from assured amenities. About 45% of the total land for a proposed layout must be earmarked for facilities such as roads and Open Space Reservation (OSR) to obtain approval from planning authorities, while the rest can be developed as plots. Former president of Tamil Nadu chapter of Confederation of Real Estate Developers Associations of India (CREDAI) N Nandakumar said that many plot promoters offer attractive facilities to woo customers, but fail to deliver. “For instance, some promise black-topped road, though buyers end up with gravel pathways. A few even offer to plant saplings and nothing would be available in reality,” he said. Nandakumar notes that a section of plot promoters seldom adheres to the development regulations with much of the space earmarked for common amenities being diverted for other commercial purposes. “Against this backdrop, RERA can play an effective role as the promoters should provide the amenities assured to buyers,” he added.
The act clearly states that defaulting promoters shall be punishable with imprisonment for a term which may extend up to three years or with fine which may extend up to a further 10% of the estimated cost of the project or with both.
RERA will also open a window to access complete details about real estate projects. Leading developer Chitty Babu said that details on all projects registered with RERA will be available in an exclusive portal. to be created by the authority. “It (web portal) “It will be a great tool for understating a project ahead of buying a property,” he said.