In order to ensure that the real estate promoters undertaking housing projects, utilize the funds collected for a particular project, for the development of the same project and not invest it elsewhere (leading to delay in execution and probable cost escalation), the provision for keeping a specified percentage of money collected from the allottes, to cover the cost of construction of the project, in a separate account has been made in the Draft Real Estate (Regulation and Development) Bill. This was stated by Shri Ajay Maken, Union Minister of Housing & Urban Poverty Alleviation (HUPA), in the Lok Sabha today, in a written reply to a question by Shri Naranbhai Kachhadia.
The Minister further stated that the Real Estate Regulatory Authority, proposed to be set up under the Bill, can call for information and conduct investigation based on a complaint alleging non-compliance by a promoter. Also with this provision in place, the audit agencies of the promoter organizations will ensure that the norms are adhered to, while maintaining the project accounts, the Minister added.