The Mamata Banerjee government has drafted a bill to protect home buyers that so far seems to have refrained from following the many states that have watered down central provisions.
The West Bengal Housing Industry Regulation Bill, circulated but not yet tabled, is almost identical to the Real Estate (Regulation & Development) Act promulgated by the Centre. Several states had chosen to frame diluted rules under the central act but Bengal is seeking to enact a law of its own.
The following are some of the key features of the Bengal bill:
- All ongoing projects that are yet to get a completion certificate will come under the purview of an authority that will regulate the segment. Each phase of a large development will be treated as an individual project requiring registration under the authority. Several states had diluted this provision by exempting ongoing projects.
- The authority will seek and upload on its website details of a project and the record of the builder.
- The builder must rectify free of cost any structural defect detected up to five years from the date of handing over possession.
- Seventy per cent of the amount received from buyers in a project has to be kept in a separate bank account to cover the cost of construction. The promoter can withdraw sums from this account in proportion to the percentage of completion. This provision is aimed at averting diversion to other projects — a recurring and debilitating problem.
- Apart from minor changes, no addition or alteration can be made to sanctioned plans of buildings or common areas without written consent from two-thirds of the buyers. If a person owns multiple flats in a project, his or her consent will be quantified as that of one person.
- If a builder fails to deliver on time and the buyer wishes to withdraw from the project, full refund, along with interest and compensation, will be mandatory.
- If a promoter fails to follow the provisions for registering a project with the authority, a penalty of 10 per cent of the project cost can be imposed. Failure to comply with the authority’s orders can attract a three-year jail term.