Strict guidelines for housing developers in the offing

Strict guidelines for housing developers in the offing
The government is coming up with a slew of measures for the housing sector to check malpractices and irregularities.
The measures include making it mandatory for the housing developers to safely deposit the payments collected in advance from the customers in separate bank accounts till they hand over the housing units to the buyers.
So far, developers have been collecting money in advance and using it to finance the construction, among other development works.
“But we are restricting such practices,” said a top official at the Department of Urban Development and Building Construction (DUDBC), a regulatory authority for the housing sector. He said the department is soon finalizing the measuers and forwarding them to the Ministry of Physical Planning and Works (MoPPW) for enforcement.
“We are putting forward recommendations including compulsory provision to deposit the amount collected from apartment bookings at investor banks so that customers´ money as well as banks´ lending would be more secure,” a top ranking officials at DUDBC told the Republica.
The soon-to-be-finalized recommendations include that the government should request Nepal Rastra Bank (NRB) to instruct banks and financial institutions to control lending to the housing developers, who are found flouting the laws.
In an effort to make more effective monitoring of housings, DUDBC has suggesting to increase the number of engineers for monitoring to seven from existing three. Total 85 housing companies are registered in the capital. “In addition to regular reporting from DUDBC, we are proposing a third party – independent consulting firms – to assess the operation of housing sector in the country – a practice which is popular in other countries,” said the source.
Similarly, an all-powerful body has been envisaged in the proposed recommendation to introduce a single-window policy to oversee the process of regulation, housings registration, monitoring and punishment to developers.
Given the huge number of real estate developers defaulting the Environment Impact Assessment (EIA) and Initial Environment Examination – a mandatory provision as per Environment Protection Act – DUDBC is preparing to recommend to relax the provision.
“We are also planning to recommend that properties owned by promoters of the housing be frozen if the developers are found to have started construction of housings without getting permission from DUDBC to discourage haphazard constructions,” the source added.
Besides, mandatory provision for banks and financial institutions to lend and permission for advertising the booking announcements to only those housings which have got permission from DUDBC are also among the proposed recommendations.
Three housings want to drop the projects
Amid slump in demand for apartment and tight bank lending, some housing companies are planning to drop their projects for now. According to a source, AN Apartment of Anamnagar and Eco Apartment of Babar Mahal have already informed their will to scrap the projects whereas Orchid Housing is preparing to convert the proposed housing project into hotel.
Source : Republica


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