Govt Plans Realty Sector Regulator

Real estate agents trying to palm off property whose ownership is a tangled mess of court cases amongst uncles, aunts and an army of cousins of the alleged seller will soon turn into yesterday's nightmare. In a bid to protect consumers, the urban development ministry is planning to create a statutory regulator for the real estate sector. A real estate commission will be set up to frame guidelines and a code of conduct for property dealers.

Property dealers and architects will have to get themselves registered before doing business The commission is likely to be formed as part of the proposed real estate bill, which would institute a series of strict regulations for dealers/agents as well as developers. The bill is expected to be introduced in the winter session of Parliament.

So, whereas there will be strict vigil to ensure that developers do not indulge in unethical practices such as land hoarding, the consumers will also have access to the antecedents of the properties they intend to buy. This would ensure they don't lay their hands on disputed or unregistered property. The neighborhood property dealers will have to compulsorily seek licence from the proposed commission for practising in specific catchment areas.

To further protect the interest of consumers, the commission will also entertain complaints against dealers and will be empowered to take punitive action. A senior official concerned with the project told ET, "At present, hundreds of builders, brokers and property dealers are functioning in various parts of the country without any kind of licence or regulation. Most of them don't even know about property related laws. There are many cases where they have even sold unauthorised constructions or disputed properties to innocent buyers."

The proposed commission will also look into the earnings of the dealers and brokers. At present, they charge a commission of up to 4% from buyers and sellers, which are totally unregulated and not taxed.

There are also plans for setting up an assistance window at the proposed commission, where prospective buyers will be able to thoroughly check the antecedents and other details of the property.