In lieu of several stalled real estate projects in Uttar Pradesh that have adversely affected prospective homebuyers, an expert committee has proposed several measures, such as introducing changes in the insolvency law, to provide relief for builders so they can complete their projects and hand over the buildings to buyers.
According to a report by Hindustan Times, the central committee led by India's G20 sherpa and former Niti Aayog CEO Amitabh Kant, in its report recommended the UP government that the three authorities - Noida, Greater Noida and Yamuna Expressway - should allow the registration of flats without asking the defaulting builders to clear their dues.
The report was sent on Monday to the CM Yogi Adityanath-led government, which then sent it forward to the three authorities for deliberation and implementation. The top officials of these three authorities will make a decision during their board meetings. After this, the UP government will give its final approval to the report after possible changes.
List of recommendations for UP real estate authorities
The report strongly recommended that priority should be given to the homebuyer getting flat possession and the execution of the registry, adding that the authorities can recover their costs later. It also said that no developer can charge any penalty for late payment from homebuyers who have been harassed by the builders.
Furthermore, the UP Real Estate Regulatory (UP-RERA) has been asked to identify complete projects that have not been able to obtain an occupancy certificate due to the financial dues of the builders, and they should immediately issue the certificates and facilitate the registry of the stalled projects.
Authorities can also recover their financial dues by taking over unsold flats or undeveloped land in a project later on, the report suggested. An existing developer can also bring in another developer for the completion of the project and allow an additional time of three years to finish a stalled project without any extra charges.
The report also recommended authorities to not charge any interest from the builders going through a financial crisis and must not cancel the lease of realty projects on the basis of defaulting developers and work under UP-Rera supervision, among other reasons.
It also proposed changes in the Insolvency and Bankruptcy Code to ensure a project-wide approach, in which a single project under a developer can be considered for resolution, instead of affecting all projects under the same developer.
Relief for homebuyers in UP
According to media reports, builders in the three authorities - Noida, Greater Noida and Yamuna Expressway - owe nearly Rs 50,000 crore, excluding premiums, interests and penalties for over 3,000 stalled real estate projects. Therefore registration of several projects is not being allowed, as per rules, as the developers are failing to pay their dues, impacting 167,000 homebuyers.
If the proposals are brought into effect, it would provide relief for homebuyers as the process of granting possession would be set up. Many homebuyers have been waiting for several years to get possession of their homes, as developers in crisis have refused to pay their land cost dues. These measures have been recommended for the timely completion of real estate projects.
The Amitabh Kant-led committee was formed by the Union Ministry of Housing and Urban Affairs in March, comprising of officials from expert agencies. They were tasked to carry out meetings with stakeholders to formulate an effective policy to address and resolve the crisis situation in the real estate sector across India.
Prior to this, UP-RERA chairman Rajive Kumar had made similar recommendations focusing on delinking the registry of flats from the financial costs of realty developers.
ALSO READ | Uttar Pradesh: Comprehensive action plan in 2 weeks to resolve stuck up Noida housing projects
