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Real Estate Bill Update: Homebuyers Can Now Be Put To Jail

Posted by Guenee Abragan on Mar 20, 2016 07:17 PM EDT
Dharavi Slum Redevelopment Resisted By Residents more big
A man holds a tray on his head as he walks the street at the Dharavi slum, said to be 'Asia's largest slum', April, 05, 2008 in Mumbai, India. A city redevelopment program to convert this prime real estate area into high rise buildings is under way. Locals demand bigger compensation for the old dwellings and the thriving small scale industry demands bigger pay outs.( (Photo : Uriel Sinai/Getty Images)

The Real Estate Bill 2016 had signalled that a homebuyer can be jailed up to one year if he does not obey the orders of the Regulatory Authorities or Appellate Tribunal. While the bill has passed the Rajya Sabha, Lok Sabha only passed it last Tuesday. 

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Buyers have rallied to criticize the provision, claiming that they were on the losing side in the fight against developers most of the time. They warned that they will be forced to move to court when left with no choice. The provision of one year imprisonment can be utilized by the powerful developers to further control the buyers. Sanjay Singh, a home buyer in Noida Extension, said that this provision will make buyers worried about going to the authorities against the developer.

The Real Estate Bill, however, had been pointed out by consultants and developers as lacking any provision to be invoked against the buyers. They claimed that in most of the cases, being the criticized party, they only turn to court or authorities for resolution over grievances. In a majority of cases, developers move against buyers for non-payment of dues. According to NDTV, if the intention of the buyer is not negative, such harsh measures like imprisonment would not be used.

According to Credai president Manoj Gaur, the inclusion of the provision was also expected to be useful in deterring blackmailers, who use legal provisions to harass the stakeholder. He added that such behavior of buyers had led to delay in many projects.

On the other hand, Sanjay Dutt who is the MD of Real estate consultancy firm Cushman and Wakefield, said that while the bill is consumer-friendly overall, it also solidifies the rights and duties of an allottee. According to The Indian Express, the penalty would give an equal standing to both parties in a real estate transaction. He views this as a way to impose higher accountability in the sector.

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