The real estate industry in New Delhi is not enthused by the new and improved real estate regulatory bill. Builders and consultants in the industry feel that while it will bring in transparency into the system, some of its provisions may also open another window for corruption. The Union Cabinet approved the Real Estate Development and Regulation Bill late on Tuesday along with certain key amendments that will make way for setting up of a regulator for the sector. The Bill and a uniform regulatory.
The bill offers deemed approval for projects after 15 days of submission of documents, after which regulator has the power to scrutinize the documents and cancel the approval. Expressing concern on the same, Getambar Anand, the newly appointed president of developers’ body CREDAI and chairman and managing director of ATS Infrastructure says, “Post review of documents after the specified 15 days time frame is not a good idea as this will open a huge window for corruption. This process should have been automatic.” Since the definition of willful defaulters is not quantified, Anand feels the clause on revocation of registration is dangerous for developers. “There should not be a knee-jerk reaction in licence cancellations. There should be a proper show cause notice and a 90-day window before any action is taken.” According to Niranjan Hiranandani, managing director, Hiranandani Constructions, the devil is in the details, but this move will surely bring transparency in the business. However, he feels funding arrangements will now be a major challenge for the already cash-crunched developer community. “Need for funding will surely go up, and we will have to study how this clause pans out in times to come,” he says. Developers will now have to compulsorily deposit 50% (or such lesser percentage as notified by the appropriate Government) of the amounts realized for the real estate project from buyers in a separate account within a period of 15 days to cover the cost of construction. This new bill is likely to bring in more institutional players into the business, says Vineet Relia, managing director of SARE Homes. “It is important to fix the rules of the game. Now that this is done, investor confidence will surely get a boost.” Developers also expressed concerns on the move to exclude sanctioning authorities from the ambit of the real estate regulator. “Developers should also get a chance to appeal against any delay in approvals like occupancy certificates to the regulator,” says Anand The move to include ongoing projects that have not received completion certificates so far under the purview of the Bill also did not go well with the community.