Real estate developers who delay the construction of buildings in Tamil Nadu may soon land in jail. The state government has drafted rules under the central Real Estate (Regulation and Development) Act, 2016, which includes jail time for not handing over property as per schedule.
The government is seeking feedback for the draft rules. While industry experts have welcomed the strict measures for developers and agents, many believe that the rules will not be effective unless there is a single window system in place.
Confederation of Real Estate Developers' Associations of India (Credai) Chennai president Suresh Krishn told ToI that there were not many differences between the central rules (released to provide guidance to state governments to develop rules) and the newly drafted state rules.
â€śThe draft rules have not addressed the single window clearance approvals for housing projects, which is essential for the successful implementation of the act,â€ť he said
The rules promise full refunds to homebuyers within 45 days â€śif the builder has not followed the time scheduleâ€ť. Promoters who donâ€™t pay up on time can be dragged to court, but can be let off if they pay 10% of the estimated property cost as penalty.
Mandating the registration of real estate agents, the draft also provides for the constitution of a real estate authority and an appellate tribunal, where consumers can take their grievances.
The draft rules also mandate builders to register their projects with the real estate authority with all necessary details.
The rules will be notified after the state government passes them in the Assembly. Official sources have reportedly said that this is unlikely to happen in this session, as the government is still waiting for comments from the public.