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BW Businessworld

Real Estate Bill: The Contentious Clauses

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Passing of the Real Estate (Development and Regulation) Bill in Parliament is yet another challenge for the NDA Government which is already struggling with numbers for the passage of the Constitution Amendment Bill or the GST Bill. The Bill is expected to be taken up in the Rajya Sabha on Tuesday (5 May). The Congress has said it will oppose the bill strenuously as it is anti-home buyer and pro builder.
 
NDA, which is short of numbers in the Rajya Sabha, was forced to defer the bill on April 29 after opposition insisted on referring it to the Select Committee of Parliament.
 
Congress has already termed the Central government as ‘pro-builder’ after accusing them of being ‘pro-rich’ and ‘pro-corporate’, a charge denied by the ruling party. The Real Estate Bill that was formulated under the UPA regime has been modified to suite the interest of builders alleges the Congress.
 
Here are some of the key differences in the current Bill as compared to the UPA Bill.
 
Main Changes
Escrow Account: The Bill allows builders to deposit only 50 per cent of the money collected from prospective buyers in an escrow account as against 70 per cent mentioned in the UPA Bill.
 
Blacklisting: The UPA Bill had provision for blacklisting of builders in case of delays in projects. The current Bill does not support blacklisting
 
Real Estate Regulator: The current Bill states that any disputes between consumers and builders should be resolved at Consumer Court whereas the UPA Bill had stipulated dispute resolution at the appellate body of the proposed real estate regulator.
 
Background Verification: The earlier UPA version of the Bill had provisions for background verification of builders; this is not the case in the current Bill. 
 
Punishment: Rigorous punishment outlined for violators in the UPA version of the Bill whereas violations does not attract any rigorous punishment.
 
Alteration: The earlier Bill prevented builders from altering a sanctioned plan once it had been approved but the new Bill would allow them to make minor alterations. There is no explanation of what is a minor alteration.
 
Employment with Builders: Members of the proposed Real Estate Regulatory Authority can take up employment with builders after demitting office. This was not the case in the UPA Bill.
 
Political experts said the NDA government could find a middle way by agreeing to send the Real Estate Bill for vetting by a Parliamentary Standing Committee. If it does so, the fate of the Bill will only be decided in the Monsoon Session.