Remove overkill in real estate regulator

Remove overkill in real estate regulator

The government has set a three-month deadline starting May 1 for all state governments to appoint a Real Estate Regulatory Authority. This is fine, having notified the new law to ensure fair trade practices in the real estate sector in its entirety. But why treat real estate developers like smugglers? The penal provisions for failure to comply with the law are draconian and arbitrary.
A developer would be slapped a stiff penalty of up to 10% of the estimated cost of the project if he fails to register the project. Failure to register despite orders issued by RERA will lead to imprisonment for up to three years, or an additional fine of 10% of the project cost or both. A jail term, be it for an errant developer, real estate agent, an employee in charge of a real estate company that has violated the law or even an allottee who fails to comply with the orders of the appellate tribunal, is way too drastic. The reputational damage to a builder using unfair practices -such as advertisements for new projects without securing clearances, hidden costs, not specifying a date of delivery and lack of transparency to deal with price escalations -is enough deterrence. Outright cheats and fly-by-night operators can be tackled under extant law.
The Real Estate (Regulation and Development Act) 2016 envisages compounding of offences, but there is scope for arbitrariness. It says “notwithstanding anything contained in the Code of Criminal Procedure, if any person is punished with imprisonment under this Act, the punishment may, either before or after the institution of the prosecution, be compounded by the terms and conditions prescribed by the court. Regulation must be sensible to ensure accountability and transparency, not stifle the growth of the sector, in urbanising India.