Developers and industry watchers have hailed the Cabinet approval for Real Estate (Regulation and Development) Bill, saying it would set the benchmarks in consumer rights protection.

However, they also pointed out that if speedy project approvals are not factored in, it could lead to project delays and even rise in costs.

The Union Cabinet had approved the Real Estate (Regulation and Development) Bill, 2015. The Bill will now be taken up for consideration and passage by Parliament.

Navin Raheja, Chairman, Naredco Advisory Council and Real Estate Committee, FICCI , said, “We wish the sanctioning authorities in the estate were included in the Real Estate Bill because without bringing them on board, delays would continue in the implementation of projects. And we wish the project escrow account should have been at a lower realistic level as per actuals.”

Vineet Relia, MD, SARE Homes, said: “The sector is currently going through a wait-and-watch phase. As a developer, we are hoping that the amendment would promote speedy approvals and execution of projects, bring about professionalism and accountability in real estate transactions.”

The Bill regulates both commercial and residential real estate projects. The Bill has also proposed setting up an escrow account to cover the construction cost of the project for timely completion of the project.

Sachin Sandhir, Global MD, Emerging Business, RICS, said, “It is a welcome move to amend certain aspects of the Bill which will benefit end users greatly, especially putting aside 70 per cent of the sale proceeds in an escrow account to meet the construction cost. If effectively monitored, this will lead to faster execution and delivery of the projects which is a critical challenge in the real estate sector in India.”

Amit K Lalit, CEO Valion, a private realty wealth management firm , pointed out, “It is a great initiative to keep a significant portion of sale proceeds in escrow as that would ensure timely execution of projects and hold temptations of developers to use customer funds for alternate investments.”

The Bill provides uniform regulatory environment to ensure speedy adjudication of disputes and orderly growth of the real estate sector. It also ensures mandatory disclosure by promoters to the customers through registration of real estate projects as well as real estate agents with the Real Estate Regulatory Authority.

Hemal Mehta, Senior Director, Deloitte in India , said: “Introduction of the Bill will certainly bring higher disclosure related to the project and increased onus on the developers.''

Anshuman Magazine, CMD, CBRE South Asia, said, “The ease of doing business needs to be implemented in the real estate sector by making it easier for doing development by time-bound approval mechanism by the government/local/urban bodies. Therefore the government bodies also need to be held accountable for ensuring reforms in archaic laws and timely project approvals.”

The Bill envisages establishment of fast track dispute resolution mechanisms for settlement of disputes through adjudicating officers and Appellate Tribunal.

Meanwhile, the shares of real estate companies gained after the Cabinet had on Wednesday announced some amendments and approved the Real Estate (Regulation and Development) Bill, 2015.

Realty indices on both the Bombay Stock Exchange and National Stock Exchange were among the top gainers. The BSE Realty Index was up 1.1 per cent, while the Nifty Realty index was up 1.4 per cent.