The government has taken an initiative to bring the booming real estate sector under a strict guideline with provisions of jail and fine against those who will run a housing project without approval from the relevant authority and violate any agreement with buyers.
A draft ordinance, approved by the Council of Advisers on April 2 last, has sought, among other stern measures, to keep provisions of maximum five-year imprisonment and Tk 10 lakh fine for running a housing project without approval.
The draft Real Estate Management Ordinance 2008, also proposes a 3-year jail and Tk 10 lakh fine if any developer changes the plots or flats for which it had an agreement with buyers.
Meanwhile, as per the Cabinet suggestion a meeting of the sector stakeholders will be convened by the Ministry of Housing and Public Works tomorrow to illicit their opinions on the proposed guideline.
The new move, some of the customers of the sector hope, will help them to get rid of deception by any real estate company as there is no guideline now to monitor the activities of developers. They said at present the deceived clients have nowhere to go for lodging complaints, or getting justice for any breach of contract for apartments.
And also, the Real Estate and Housing Association of Bangladesh (REHAB) is also not in a position to take any effective measure against its members since the association itself have so far failed to formulate any code of conduct for their members.
The REHAB however suggested the government bring about some changes in the draft ordinance making it a balanced one.
REHAB President Tanvirul Haque Probal said they do not see anything bad in formulating any ordinance for streaming the activities of the developers.
'Some changes in the ordinance are needed as some clauses would be detrimental to the developers and many innocent ones will have to leave their business,' he said.
The guideline proposed that the registration of real estate companies with a designated government agency should be mandatory.
Every developer has to apply for such registration in a prescribed form and fulfill some set criteria to run business.
Trade license, TIN number, VAT registration number, Memorandum of Association and Articles of Association and certificates of incorporation and registration certificate will have to be attached to the application for registration.
If anyone flouts the rule, he or she will be fined Tk five lakh, said the proposed ordinance.
The ordinance also proposed a two-year imprisonment and Tk one lakh fine if any developer mortgages any constructed or under construction plots, flats or spaces without informing its buyers.
It also proposed a five-year jail and Tk five lakh penalty for not using construction materials as agreed by any developer.
Any unauthorised suspension of any construction work for three months entails two-year rigorous imprisonment and Tk five lakh penalty or both.
A high official of the Rajdhani Unnayan Katripakkha (Rajuk) said this ordinance would reduce the harassment of buyers of flats and plots to a great extent.
'We could not take action against any defaulter developer due to absence of proper rules, though we were swamped with complaints,' he said.