Relief for 2.4 lakh home buyers, registration of flats can start after builder pays 25% dues

The state government has also issued a phase-wise strategy for Noida, Greater Noida Authority, and Yamuna Expressway Industrial Development Authority (YEIDA) to implement the package.

Officials said that about 50% of recommendations of the Amitabh Kant Committee, constituted March 31 by the Union Ministry of Housing and Urban Development to provide solutions for the stalled projects, have been accepted with amendments. They said that it will help the builder complete the projects soon and accelerate the handover of the flats to the buyers.

According to the order, the registration of stalled flats will kick off after payment of 25% of the total outstanding amount by the builder. Along with this, the builder will get the benefit of zero period for two years in view of Covid-19 pandemic.

Under the zero period waiver, interest and penal interest will not be levied on the builder for the said period, and the installments will be shifted beyond it.

Besides, if a builder is unable to complete a project in three years, the process of bringing in a co-developer has been made easier.

The move is likely to benefit around 2.40 lakh home buyers in the region who have been waiting for the registry of flats for many years.

“Real estate is an important sector and more than 200 industries are associated with it, and a large number of employment is generated in it. According to the estimates of the Indian Banks Association, there are about 4.12 lakh such houses across the country, which are not being completed due to the poor financial condition of the developers. Out of these, about 2.40 lakh houses are located in NCR,” reads the order by Manoj Kumar Singh, infrastructure and industrial development commissioner, UP government.

He further said, “The flat buyers are unable to pay their installments to the builder because of the question (mark) on the registry of the flats. Apart from this, the buyers are paying the EMI to the bank and paying the rent of their rented accommodation, which is a double burden on them. The bank and other financial institutions are not providing loans to complete the stalled project because of the current situation.”

The order stated that this policy will only apply to residential projects.

“The relief of zero period will be given from 01.04.2020 to 31.03.2022. In case of NGT order to provide zero period relief from 14.08.2013 to 19.08.2015 for 10 kilometers area of Okhla Bird Sanctuary, it will be considered on a case-to-case basis. The amount already deposited with the authority will not be returned after implementation of these provisions,” stated the order.

The pending dues of the authority on the builders will be re-verified with the help of an independent Chartered Accountant.

“After depositing 25% of the net dues (by the builder to the authority), the registry, plan approval, extension etc. will begin immediately. The developer will have to pay this much amount (25%) within 60 days after the acceptance of the package. Rest of the 75% dues, along with interest, will be paid in three years. Dues up to Rs 100 crore will be paid in a maximum of one year, dues up to Rs 500 crore will be paid in two years, and dues above Rs 500 crore will be paid in 3 years. The concession given to the developer and the payment of net dues to the authority and the registry of houses to the flat buyer will be linked to each other,” read the order.

If a developer fails to complete the project within the stipulated time frame, a penalty of 20% will be levied on the remaining amount of dues after a period of three years, and efforts will be made for completion by the project authority. If the dues have been paid to the authority then a penalty will not be imposed.

The order also stated that keeping in mind the circumstances of the project, a timetable for completing the construction of buyer’s flat and payment of dues to the authority will be given by each builder in view of the above provisions. If any milestone is missed, then the concession amount for that period will not be adjusted.

Apart from this, the builder will get permission to mortgage the land after the payment of 25% of the dues so that they can mobilise the resources to complete projects and pay remaining dues. The lease deed will not be cancelled for those developers who accept this package.

“In projects where State Government packages/concessions have been availed, no penalty/additional interest/additional cost will be charged from the home buyers so that the buyer ultimately gets the benefits being allowed to the builder by the government/authority,” the order stated.

Partial surrender/cancellation of land unsuitable for the project will be allowed. The authority will adjust the amount already paid for the surrendered land with the dues of the developers, according to the order.

The order stated that the implementation of the package will be monitored by the Board of the Authority, which will approve all important decisions. This will be mandatorily monitored as an agenda in every board meeting until the implementation of the package is completed, it added. If necessary, the developer and buyer will also be invited for monitoring from time to time, it further stated.