Realtors have opposed the draft of the Real Estate Management Ordinance-2008 saying that the penal provisions incorporated in the draft will hurt the growth of the sector.
The Real Estate and Housing Association of Bangladesh (REHAB) Thursday placed recommendations on the proposed act, urging the government to review it for the greater interest of the sector.
"We have submitted our recommendations Thursday on the draft act as the contents are contrary to the growth of the sector," said Tanveerul Haque Probal, president of REHAB.
The government took a move for enacting a law for streamlining the real state and housing sector amid widespread allegations of encroachment of private and public lands, breaching of contracts with buyers and deception by a section of homebuilders.
As per the draft law, unregistered developers will be fined Tk 500,000 and repeated violation will carry a five year jail term along with a fine of Tk 200,000.
The proposed law said the real estate companies have to be registered with the National Housing Authority and other city-based government owned development authorities.
But, REHAB said the developers should not be required to register with any government entity if they become members of the REHAB.
If developers stop construction works of flats for a period of three months or more, they will be liable to suffer a prison sentence of two or a fine of Tk 500,000 or both, according to the proposed law.
REHAB in its proposals said, there should not be jail provisions for the developers.
It suggested inclusion of fines and cancellation of registration in the draft act instead of jail provision.
The draft act said if intending buyers fail to pay installments timely, developers would have the right to cancel the booking only by issuing notices three months' ahead of such cancellation.
But, REHAB said the time frame for serving notices should be 60 days instead of 90 days.
In case of default on the payment of installments, the developers must return the money already paid by the buyers within two months of cancellation of flats, the draft act said.
REHAB said there should be laws for realising installment money from the buyers on time.
The proposed act said, developers will provide free of cost the repair facilities for a period of two years after handover of flats to the buyers.
REHAB said, the period of free repair works by the developers should be one year.
The proposed act said the developers will have to ensure all utility services before handing over of the flats to the buyers.
The act also said the developers concerned must inform the buyers in writing stating the exact time for providing such utilities.
The proposed act said there will be provision for mortgage of the allocated flats before completion and there will be tripartite agreements involving buyers, developers and financial organisations.
Contradicting the provision, REHAB said mortgage system will obstruct the project implementation.
In case of cancellation of allocation of flats or commercial spaces by the buyers, the law proposed for a 10 per cent deduction from the amount paid by the buyers.
But, REHAB said in this case, the buyers should pay 5.0 per cent of the total valuation of flats or commercial spaces.
The acts also said developers will ensure adequate spaces for easy access of sun light and wind.
It also said developers will be barred from deviating from designs approved by the concerned authorities and agreed by the buyers.
