Cabinet nod to real estate bill that will assuage Oppn concerns
December 09, 2015  23:00
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The Union Cabinet today 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.

Reaching out to the opposition, the Cabinet, in its meeting chaired by Prime Minister Narendra Modi, 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 amended bill also provides for imprisonment up to 3 years for the builders in case of violations of the provisions of the proposed law and upto one year in case of real estate agents and buyers, according to a senior official of the Urban Development Ministry.
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