For homebuyers, the buck will stop at real estate agents. From now on, they will have to pay if a flat or a property buyer is duped by a developer.
To protect the interests of buyers, the state government has proposed levying five per cent of the total property price as penalty on agents who have marketed a construction project where a buyer has been duped because the developer has abandoned the project for non-compliance of papers, norms or financial turbulence.
The state is also contemplating penalising agents if the builder does not deliver the property in time.
"Most times, a buyer is completely dependent on the information provided by the real estate agent or the marketing representatives of developers. In cases where the developer cheats the purchaser, the agents, too, need to be made culpable," said a housing department official.
The government is also considering bringing financial institutions and banks under the ambit of the new rules that are being fine-tuned by the state housing department to ensure effective implementation of the Real Estate Regulation and Development Act (RERA). The Act, approved by the union government, came into force in May 2016.
State housing minister Prakash Mehta was not available for comment despite our repeated attempts. However, a senior official attached to the housing department confirmed the development. "Once the law and judicial department approves the draft, suggestions and objections will be invited before making it a legislation," the official said.
Under the Act, state governments have to establish a regulatory authority and frame rules for implementation of the law. As part of this exercise, the Maharashtra government has drafted a proposal enabling the levying of fines on real estate agents. The aim is to regulate the construction industry and protect the interests of homebuyers.
"There is no system in place where a buyer can verify documentation of any project or property. Based on information provided by brokers (real estate agents) or advertisements, citizens tend to put all their hard-earned money into purchases. To make agents and banks more accountable, the rules to levy and fix quantum of penalty have been worked out," the senior Mantralaya official said.
What developers want
While everyone in the government is comfortable with the inclusion of agents, some top-ranking bureaucrats and ministers have expressed reservation over the inclusion of financial institutions and banks under the same rule.
"That will further discourage them from funding projects or developers. It will then affect the construction industry, which is already witnessing a slowdown and financial crisis," a mid-ranking official attached to the housing department said.
The developer fraternity has welcomed the move, but claimed that the Act will not be effective and complete unless everyone related to the project is brought under the ambit of the rulebook.
"Builders and agents are made accountable. What about those who are responsible for giving permissions for the project? All agencies (civic body, collector's office and government administration) should be brought under the Act. Many projects are delayed or stuck because of delays in getting permissions and clearances. If these government agencies are brought under the Act, the process will become more transparent and effective," said Dharmesh Jain, president of the Maharashtra Chamber of Housing Industry.