Select panel seeks stricter version of Real Estate Bill

The Select Panel appointed to review the Real Estate Regulatory Bill has drawn up a list of as many as 37 suggestions, seeking to incorporate them before the bill is turned into law.Sources tell CNBC-TV18 that among key recommendations that the panel has made include forcing developers to deposit a minimum 50 percent of funds taken from homebuyers into a separate escrow account, which may be withdrawn only after project completion.The bill, which is yet to pass muster in either houses of Parliament, had originally proposed to have developers deposit 70 percent of amount collected into escrow accounts, and had said these could be utilized only for "construction" purposes of the same project. Builders had criticized this clause, stating that often in projects, construction costs are not as high as 70 percent of total costs, and this will mean part of their funds would get locked up.Sources say the panel has also suggested -- in light of a string of complaints over one-sided agreements signed by builders -- that the rate of interest to be paid will be equal in case of default on the part of the homebuyer as well as on part of the builder in case of project delays.Among other changes, the panel is learnt to have proposed banning the reappointment for the state realty regulator and has said that post a five-year tenure, chairmen cannot seek employment in the private sector.The panel is also understood to have recommended the Act covering housing projects on land below 1000 sq metre in the proposed Real Estate Regulatory Bill.According to the original provision in the Bill, builders could register with the regulator only if the project was on land exceeding 1000 sq metre.The passage of the Real Estate Regulatory Bill will pave the way to set up state-level regulatory authorities (RERAs) to serve as a watchdog for the sector.The Bill was referred by Rajya Sabha to a Select Committee on May 6 for its examination with instruction to submit its report by the last day of the first week of the next session of Parliament, which is the current monsoon session.The 21-member committee headed by BJP member Anil Madhav Dave is likely to submit the report this week.- With inputs from CNN IBN