Cabinet gives its nod to slew of amendments in RERA Bill

The Union Cabinet on Wednesday approved various amendments to the contentious real estate Bill, introducing provisions for depositing 70 per cent of the project cost by builders into an escrow account and punishment for violations of the proposed law, meeting key opposition demands.

According to reports in the media, the Cabinet approved a string of amendments to the Real Estate (Regulation and Development) Bill, 2015, aimed at protecting the interest of the buyers and promoting investments in the sector while ensuring transparency.

A key amendment is the provision for depositing 70 per cent of the money received by the builders from buyers for a project into an escrow account, especially created for the concerned scheme, so the builders do not invest a large portion of the money thus raised for other projects. It would also act as a safeguard against uncertainty over a project in the event of the builder backing out.

The real estate Bill approved by the previous UPA Government had provided for deposit of 70 per cent of the funds raised from buyers into the escrow account but it was reduced to 50 per cent by Rajya Sabha’s select committee which examined the bill.

The UPA Bill had a penal provision for violations, which was not there in the one brought by the Modi Government.

The Congress-led opposition had been insisting on reintroduction of these provisions in the amended Bill.

Wednesday’s decision has significantly improved the prospects of the bill getting passed during the current session provided Congress allows normal functioning of Parliament.