THIRUVANANTHAPURAM: The State Cabinet has revived the proposal for a comprehensive legislation to regulate real estate sector in the State.
The Department of Law has been asked to come up with a draft, Chief Minister Oommen Chandy told newspersons here on Wednesday.
The legislation was in the making last year but the State Government decided to wait out since the Centre had come up with its own Bill with broadly similar objectives.
The Union Cabinet had approved the Real Estate (Regulation and Development) Bill. But it is still awaiting the nod of Parliament.
This is what has prompted the State Government to get back to drawing board and get going with the draft.
According to the Chief Minister, the legislation will be drafted in a manner that it subjects itself to scrutiny under the overarching Central law.
The State cannot afford to be seen as lagging anymore on this front in view of recurring incidents of fraud and malfeasance in the sector.
For instance, in the Apple-A-Day property fraud, money was collected from prospective investors without even buying land for the proposed project.
Some others were in the nature of illegal money chain business wherein money collected for one project was invested in another and then a third one and so on.
The Bill proposed by the Union Cabinet proposes to create a Real Estate Regulatory Authority and an Appellate Tribunal to protect consumer interests.
It moots mandatory deposit by promoters to cover the construction cost in a separate bank account to ensure timely completion of the project and prevent diversion of funds.
It prohibits the builder/developer from collecting more than 10 per cent as advance without a written agreement. This should be completely refunded too in the event of any delay.
It also proposes civil liability by imposing up to 10 per cent of the project cost on builder in case of default or violation of the provisions of the bill and criminal liability entailing imprisonment up to three years.