Realtors Against Government's Amendments on Escrow Limit

Q: The central cabinet cleared 20 amendments with respect to the real estate bill. One of the amendments involves "Increasing Escrow Limit". Realtors area against this move by the government.

Lewin G,

11th December 2015

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Hi all,
Experts surprised that while the bill has far-reaching positive consequences for the sector, it has not touched upon pricing unlike regulatory bills of other important sectors such as telecom, ports and electricity.

Nitesh Patil, Pune

11th December 2015

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Hello Prava,
But as a result of this builders will be forced to pass on the increase in cost to the consumers, who will have to pay more money for the same property. Experts and homebuyers have welcomed the bill as it offers protection to consumers.

Bikram, Mumbai

11th December 2015

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Hi Bikram,
It is true and because of this new rule, most of the developers are against it and expressed surprise on the requirement to arrange liquidity for maintaining the escrow accounts for their project under construction.

Vibhu, Lucknow

11th December 2015

@Vibhu,
Big developers can manage this additiona liquidity somehow, but how does a small developer get this going? In the short term, developers will feel the pinch particularly because of its retrospective effect for maintaining 70% of project proceeds in an escrow account.

Bikram, Mumbai

11th December 2015

On the other hand, the bill is expected to create a much-needed consumer rights protection for homebuyers, thus increasing consumer confidence and creating developer brands that will be known for quality and timely delivery of projects. However, this is a win-win situation for consumer given that developers have been anyway focusing on completion of ongoing projects.

Prava, Delhi

11th December 2015

Yes, they have also included under-construction projects. It is a bad dream for the developers. Govt. has also increased escrow limit from 50% to 70%. This will lock the cash and make builders more stronger.

Prava, Delhi

11th December 2015

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