The Real Estate (Regulation and Development) Bill, approved by the Union Cabinet on Tuesday, has been met with mixed reactions, but is expected to provide transparency and ensure developers do not delay projects or divert funds to other projects.
“The original bill has been ‘watered’ down. Earlier, developers had to set aside 70 per cent of the money mobilised from buyers during pre-sale of homes and deposit it in an escrow (temporary) account. It has now been reduced to 50 per cent,” points out M.R. Krishnan, deputy director, Consumers Association of India.
N. Nandakumar, president, Confederation of Real Estate Developers’ Association of India, says certain provisions in the Bill that will hamper affordability have not been amended.
Moreover, he fears the discretionary use of some provisions will severely affect development activity. Developers also feel let down that the Bill has done nothing to simplify the procedures for obtaining a plan sanction.
However, there are some positive sides to the Bill too, says Mr. Krishnan. The creation of a State-level regulatory authority might help buyers, who till now did not have a forum to vent their grievances.
If this authority engages proactively with stakeholders in the housing sector, it will be a boon, primarily for the investor, he says.
