Real Estate Business Bill submitted to Parliament

A law has been drafted and introduced in Parliament to address the current problems in the real estate business for livelihood and business purposes.

The first reading of the ‘Real Estate Business Bill’, introduced by Thoddoo MP Hassan Shiyan, was heard in the session held on Wednesday with the objective of facilitating sustainable development, promotion and accountability of the real estate industry in the Maldives.

According to the bill, real estate projects, developers and promoters are required to register under a regulation made by the Ministry of Housing, Land and Urban Development. It also makes it mandatory for the ministry to approve the registered projects and monitor the progress of work as per the proposed timelines.

In the past, there were cases of real estate projects coming to a standstill in the Maldives and also issues where individuals who bought units were not paid back, however, the new bill offers solutions and protection against such issues. Hence, the bill includes these provisions:

- Provide project timelines, plans and other necessary information to buyers when necessary

- The right to inspect project site(s) for quality assurances and to monitor the progress of the work

- The right to compensation for losses incurred in relation to a project

- Prohibition of advertising projects unless it is registered with the Ministry of Housing, Land and Urban Development

- Sign a real estate business agreement state the date of delivery of the unit

- Banning charging of booking fees in excess of the amount stipulated in the regulations made under the Act

- Right to compensation if the unit is developed in a way that differs significantly from the project advertisement

- Keep the payments made by unit owners in a separate Excrow account. Funds can be utilized as required depending on the stage of the project

- Housing Ministry should put a mechanism in place to ensure transparency of transactions made by unit owners to developers

- In the case of delay in completion of the project, compensation for unit owners shall be provided in accordance with the standards specified in the Act regulations

- Housing Ministry should establish a system for easy complaint submission regarding projects

The bill also lays down strict penalties to be taken against those who violate the rules made under the Act.

In addition to this, the bill also gives the ministry the power to withhold issued permits for a certain time period, revoke permits and impose hefty fines when required.

The ministry also reserves the right to impose a fine of 30% of the total cost of the project by a developer or promoter depending on the seriousness of the violation. Alternatively, they can impose a fine that may vary between MVR 100,000 or MVR 1,000,000 or 10% of the total cost of the project.

The ministry also has the power to refer the matter to the relevant investigative agencies if it involves a criminal offense.