KOCHI:An association of apartment owners in Kerala on Tuesday stated that the recently approved amendments to the Real Estate (Regulation and Development) Bill were against the interests of prospective flat owners across the country.
According to Kochi-based Apartment Owners’ Apex Association, both the State Government and the Central Government have succeeded in creating a notion that the Bill was meant for the benefit of consumers.
“But, most of its provisions are, in fact, in favour of builders,” said Association president C K Sankankutty.
“As per the amended Bill, a builder is no longer required to invest even a single penny from his pocket in his apartment project. Instead, he can raise the entire fund from the intending purchasers,” he said.
“Interestingly, the Bill allows builders/promoters in the State to divert up to 30 per cent of the buyers’ investments or advance payments, without including provisions mandating him to finish the project. In the Union Bill, it is 50 per cent,” Sankarankutty said. “This should be seen as an infringement on the Constitutional freedom of citizens. The intending purchaser (consumer) entrusts the money with the builder for a specific purpose. Diverting it for some other purpose amounts to breach of trust,” said the Association’s legal adviser Jocob Mathew Manalil.
“With the introduction of the new clause in the Bill, the government is granting legal sanctity to an otherwise illegal act,” he said.
“In the Apple-a-Day property scam, the promoters had diverted Rs 70 crore out of the Rs 220 crore they raised from investors. Going by the amendments approved by the Central Government, a builder can divert upto Rs 110 crore without attracting any legal action,” said Jacob.
He said the real estate affairs in the country were creating a situation wherein the fate of consumers, who are neither shareholders of the real estate company nor lenders to it, were dependant on the fortunes or attitude of the builder.
