In yet another example of the Centre’s inability to manoeuvre effectively in the Upper House, the Real Estate (Amendment) Bill is all set to go to a Select Committee of the Rajya Sabha. Urban Development and Parliamentary Affairs Minister Venkaiah Naidu said he will talk to leaders of various parties and get back to the House on the next step.
The Opposition, however, is convinced that the Bill will go to a Select Committee.
“The government has no other way than sending it to a select committee. They have diluted the 2013 Bill against the interests of consumers,” senior Congress leader Jairam Ramesh said.
According to the Opposition, the Bill has been modified in seven key areas by the Narendra Modi Government.
It points out that the provisions which will allow builders to keep only half the money they receive in advance from buyers, against the earlier proposal for setting aside 70 per cent of the funds in a special account, will go against the interests of consumers. The Opposition argues that such a provision will give developers more freedom to divert funds, hampering the completion of projects.
Design alteration The opposition parties also allege that the new Bill removes the provision of the 2013 Bill that provided the Appellate Tribunal the power to punish officers of real estate companies. They, however, seem to have accepted the clause which provides that if a builder wants to alter the design or the structure of the project he will need to take the consent of at least two-thirds of the buyers.
Another senior opposition leader said the present Bill favours real estate giants.
“Real estate sharks want this Bill to be passed as it is. We will not allow the dilution of the Bill. That is why we are adamant on sending it to a select committee. It seems that the Centre is convinced of our position,” the leader added.
In the Rajya Sabha, the Congress, Samajwadi Party, Left parties and Janata Dal (United) insisted that the Bill be referred to the Select Committee. “If members have some apprehensions, I am ready to defer for two-three days and then again come back to the House,” Venkaiah said.
The industry seemed to be favouring the present Bill.
On the dilution of mandatory funds in escrow account, Ashutosh Limaye, Head, Research & Real Estate Intelligence Service, JLL India, said: “If you look at it from the home buyer’s side, then 70 per cent mandatory deposit (in the UPA’s draft of the Bill) is any day better.
“But for real estate developers, land is becoming increasingly expensive to buy, especially in bigger cities. So the 50 per cent cap, in a sense, is fair to both home buyer and builder.”
Samir Jasuja, Managing Director, PropEquity, said: “Blacklisting should be done only if the builder has wilfully done misconduct with respect to cheating a customer. On many occasions approvals also get delayed by the government, which needs to be validated. Each case needs to be looked at in its own merit.”