Customers hail, realtors denounce new housing law
Customers of apartments and plots welcomed the new ordinance for regulating the real estate sector, while developers expressed their grievances saying that the new law would ruin the sector.
The government on Tuesday approved in principle the ordinance titled 'The Real Estate Management Ordinance 2008', which carries a provision for jail sentences or fines for the developers violating agreements with buyers.
The cabinet at a meeting presided over by Chief Adviser Fakhruddin Ahmed approved the draft law to put an end to harassment of clients by a section of crooked realtors.
According to the draft, the developers will be subject to two to three years in jail or a fine from Tk 5 lakh to Tk 10 lakh if they fail to start or finish construction in accordance with agreements with the clients or develop project without government approval.
The new law will make it mandatory for the real estate companies to register with a designated government agency. A fine would apply in case of failure.
Developers will also be fined for failing to inform its clients beforehand about mortgage of any complete or under-construction land, apartment or space. Besides, there will be penalties for not using agreed materials in construction and suspending a project without consulting clients.
Welcoming the law a cheated plot buyer said the new law might be able to reduce the sufferings of the customers.
Narrating his ordeal the customer said, "A real estate company gave his money back after two years of its submission, as the company did not get government's nod to go ahead with its project. Though my money lied with them for two years, they had not given me any sort of interest".
Another apartment buyer said , "Even if the law is very nice but I guess the government might not be able to implement it since the developers are very influential".
Denouncing the new law and pointing to some clauses of the law, some developers view that if it is implemented, it would destroy the real estate sector, which accounts for around 11 per cent of GDP.
"The draft law has a provision that we will have to face imprisonment even if we fail to give the utility connections to the apartment on time. It is obligation of the government to give utility facility. So why I will have to face legal action for the failure of the government," said Tanvirul Haque Probal, president of Real Estate and Housing Association of Bangladesh (REHAB).
On the provision of the draft law that binds developers to bear the repair cost even after two years of the handover of any apartment, he said myriads of things from different sectors are used in an apartment and it is absolutely impossible for any developer to bear such expenses.
However, the real estate company owners and land developers said there require no new law for booking, selling and buying of apartments and private plots since there are already many laws to handle these issues.
On the provision of handing over of money within three months by cutting down 10 per cent of the total amount, the sector people said a realtor develops his project with the money of buyers. So in such case it is not possible to pay back money until the booked plot or flat is sold again.
When asked, urban planning experts said it was premature to comment on the issue since they are yet to read the detail clauses of the draft law.
" There should be laws to guild the sector but in the law the government should make it sure that neither the buyers nor the developers get unnecessary penalty ," said environmentalist Professor Abdullah Abu Syed.
He proposed to make a provision in the law that will enable all the real estate companies become members of the REHAB to facilitate bringing all developers under the same platform.
“Most of the developers who cheat buyers are not REHAB members, so the law can make it mandatory for developers to become its members and form a committee within the REHAB comprising members from different sectors that will try to resolve any problem of the sector first. If the platform fails to solve the problem the government agencies will interfere into the sector. Otherwise it would be very difficult for the government to settle the whole things," he opined.
Comments