Thiruvananthapuram: The Kerala Real Estate (Regulation and Development) Bill has been framed in the backdrop of widespread frauds in the sector, urban affairs minister Manjalamkuzhi Ali said in the assembly on Thursday. The bill was passed by the assembly after a discussion that lasted over four hours.
Presenting the bill, the minister said frauds amounting to Rs 2,000 crore had been reported in the sector in the state. Urbanization in the state is progressing rapidly and 52% of the population reside in towns, he said, stressing the need for the bill.
Ali said the financial status of the developers cannot be ascertained before approving projects submitted by builders as it would end up complicating matters.
At the same time, the minister assured that 70% of the amount realized from the allottees by the builder, while booking, will be deposited in a separate account in a nationalized bank within 15 days so that the fund will be used only for that purpose. R Rajesh MLA said this should be ensured by amending relevant clauses of the bill as it said the amount can be "70% or lesser," which is vague, but the government refused to accept this proposal. The demand for amendment was put to vote by the opposition but was defeated by 55 votes against 33 votes.
While those who buy land and trade them by dividing them into small plots will be covered by the new act, those who are buyers and sellers of land as a whole will not be covered.