Uttarakhand Govt Moves To Crack Down On ‘Concrete Mafia’, Drafts Strict Builder Regulations

The Uttarakhand government is moving to take strong action against unscrupulous builders, often called the ‘concrete mafia’, who take investments, abandon projects midway, and abscond, leaving homebuyers in financial distress. Following directions from Chief Minister Pushkar Singh Dhami, the administration and the Mussoorie Dehradun Development Authority (MDDA) are fast-tracking a draft of stringent and transparent regulations to regulate builder activities.

The new framework aims to curb arbitrary actions by builders and ensure security for investors. A key feature will be the introduction of an escrow account system, where investors’ money will be deposited and released to builders in instalments based on construction progress. This measure is expected to prevent misuse of funds and ensure project completion.

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Over the last four to five years, numerous cases have been reported where builders started residential projects with crores of rupees but halted construction midway or absconded from the city. Many projects remain incomplete, while buyers continue to pay bank EMIs alongside rent, causing severe financial strain.

Key Points of the New Regulations

-Mandatory registration for builders: Builders must register with the relevant development authority and RERA before commencing any project. Unregistered builders will not receive plan approvals or be allowed to advertise.

-Escrow account system: Investor funds will be held in escrow and released only as construction milestones are met, preventing fund misuse.

-Prohibition on leaving the city without completing projects: Builders will be legally restricted from leaving the city until projects are completed. Absconding will attract FIRs, financial penalties, and government possession of the project.

-Online project monitoring: All project details, including construction progress, financials, and builder profiles, will be publicly available on a portal. Any deviation from approved plans will allow authorities to seal the property and take immediate action.

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Consumer Protection Measures

-Penalties for delayed possession of flats

-The builder is accountable for not providing promised amenities

-Provisions for refunds and interest for buyers

-Swift action against fund misappropriation or fraud

About Escrow Accounts: Funds in an escrow account are held by a trusted third party until all conditions of a transaction are met. If the builder fails to meet requirements, the money is returned to investors, ensuring security for both parties.

“Once these regulations are in place, no builder will be able to disappear with investors’ money. Transparency and accountability will be ensured at every step, boosting investor confidence and creating an environment of discipline and trust in the sector,” said Banshidhar Tiwari, Vice-Chairman, MDDA.

The draft regulations will soon be presented to the Chief Minister for approval, marking a significant step toward safeguarding investors and bringing discipline to the real estate sector in Uttarakhand.