New real estate bill worries builders

NDTV.com reports. Will this regulator be as toothless as SEBI.  One more department for the builders to grease. All the regulator needs to do is crack down on the black money component. Everything else will fall into place. Who will bell the cat ? Not anytime soon is my guess

The government is all set to tighten the noose around the realty industry. Under the provisions of the new real estate bill, developers may have to face stringent reporting norms.

Besides recommending a regulator for the real estate sector, the new bill also mandates the auditing of account books every quarter. NDTV has learnt that the audit of real estate companies will be conducted by auditors approved by the regulator.

As a result, the realty sector is clearly worried saying that quarterly audit amounts to overregulation.

But what does the government hope to achieve through a real estate regulator and quarterly audits. It is believed that by doing this the government is looking to keep a track on sale of properties besides having clarity on developer’s land bank. The government is also looking to overvaluation of land in accounts.

For the realty sector which is used to work in an unorganised fashion, the real estate regulator is expected to bring in proper regulation.

The bill soon coming up for clearance at the Cabinet also gives the regulator power to cancel the license of a property developer on violation of their guidelines – a step welcomed by many experts who feel that it is high time the government steps in.

It remains to be seen how far the law could be implemented, if at all it gets Cabinet approval as land is a state subject and would need active participation from the states.