NRI investment in property in India need not spend anxious moments worrying about the delay in getting possession of the residential apartments they have booked. The Government will soon bring in legislation which will ensure that builders stay with their commitments.

The Urban Development Ministry and the Department of Consumer Affairs is planning to penalise builders to the extent of 1% of the value of the property every month in case of delay in giving possession of flats.

A provision to this effect would be made in the Real Estate Management and Regulation Bill. A 1% penalty would translate into Rs.20, 000 per month on a Rs.20 lakh worth property.

This provision would have to be made in the agreement the buyer makes with the seller at the time the property is booked. The provision would compensate buyers adequately enough to cover rental income the property would have otherwise generated.

The rental values of residential value hover around 0.5% of the capital value even in metros, so a property buyer would not feel short-changed.

The Urban Development Ministry and the Consumer Affairs Department will table the final bill in the upcoming monsoon session of Parliament.

States are being asked to institute a real estate regulator to keep tabs on the activities of property developers. In Delhi , the statutory body will be set up to regulate the business practices of builders.

The Government has taken a stern view of pre-launch bookings of properties - a practice which has defrauded many an innocent buyer.

Steps to prevent recurrence of such cases are being taken up - some of these include making a bank guarantee and insurance of the property compulsory prior to the sale.

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