The existing regulations have proven to be inadequate in curbing these issues, hence the urgent need for a more effective regulatory framework.
Key provisions of the bill
One of the central features of the Real Estate Regulation Bill, 2023 is the establishment of a Real Estate Board.
This board will have the crucial responsibility of regulating and registering both real estate agents and real estate projects.
To ensure compliance, the bill also introduces an annual licensing requirement for real estate agents and sets clear timelines for registration. Failure to register can result in sanctions.
The bill places various obligations on developers, such as ensuring the accuracy of advertisements and prospectuses, adhering to approved plans and project specifications, and securing real estate projects with insurance.
It also addresses issues related to the transfer of title and compensation for losses on behalf of purchasers.
Rights and duties of purchasers
For homebuyers and investors, the bill introduces rights and duties that empower them. Purchasers will have the right to access information about approved plans, layout specifications, and completion schedules for projects.
This includes provisions for essential amenities and services like water, sanitation, and electricity, as agreed upon in the sale agreement.
Offences and Penalties
To discourage non-compliance, the bill outlines strict penalties for various offenses:
- Undertaking an unregistered real estate project is punishable by imprisonment for up to three years or a fine of no less than five million shillings, or both.
- Providing false information to the Real Estate Board can result in a penalty of five percent of the estimated project cost, as determined by the board.
- Failing to comply with the board's orders or directions can lead to daily penalties, potentially reaching up to twenty million shillings or ten percent of the estimated project cost, whichever is higher.
- Non-compliance with court orders issued under this Act may result in imprisonment for up to three years or a fine not exceeding ten million shillings, or both.
- Developers convicted of offenses not covered by other penalties may face fines of up to one million shillings.