Real Estate Regulatory Bill - Sector Update

Real Estate Regulatory Bill

Amendments to draft, dilutes the cleared bill

- Union Cabinet clears RE Bill which intents to implement best practices in the industry to ensure consumer protection in housing space, guided by state level regulator and a tribunal

- Two amendments to draft dilutes final bill - 1) lowering lock-in of customer advance from 70% to `70% & lower`, 2) removal of clause `Written Agreement in place before accepting > 10% advances`

- We believe, the RE Bill lacks implementation clarity and doesn’t address loopholes like phasing of projects for customer advances,  curbing of money laundering, etc

- We don`t see much impact of this bill on the RE companies under coverage. Lower churn of capital and escalation in approval costs are the key negatives for developers.

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