Under laws that came into force Monday, developers have to use at least 70 percent of sale proceeds to complete residential projects, rather than funnel money to other jobs, and will no longer be allowed to start pre-selling apartments before all building approvals are obtained. Developers who don't comply with the new laws face up to three years in jail.
The moves are aimed at cleaning up an industry where more than 30 percent of housing projects run at least a year over schedule, and developers are known for corner-cutting tactics such as starting work before all approvals are granted and using sub-standard materials. Developers accused of wrongdoing have seen their shares tumble, even as the main property index has surged this year.
With thanks : Economic Times : LINK : for detailed news.