In what will come as a relief to homebuyers, the Noida and Greater Noida Industrial Development Authorities Tuesday (December 26) approved the adoption of the Amitabh Kant committee recommendations on legacy stalled projects. The authorities announced a number of measures to help developers complete projects stuck for years — a two-year 'zero-period' relief; time extension of three years without any fee; provision to bring in a co-developer if builder is unable to complete the project; relaxation in conditions to mortgage; and payment of land dues in installments over three years. Under the zero-period waiver, interest and penal interest will not be levied on the builder for a specified period of two years. The order states that the builder will have to deposit 25% of the outstanding amount (land dues) within 60 days, so that the registration of flats can begin. The remaining 75% will be deposited with simple interest over three years. Why did the govt have to announce these measures? Many developers have not been able to provide fully constructed flats to buyers in Noida, Greater Noida, and Yamuna Authority for a long time, owing to reasons such as non-availability of funds, increasing dues on builders, litigations, fund diversions, criminal cases against the realtors, etc. Thus, buyers — forced to shell out both bank EMIs and house rents — are not paying due installments to the builder. Also, banks and other financial institutions are not providing loans to complete the stalled projects, over fears that the builder will default. Builders, therefore, have not paid their dues to development authorities, which in turn have not given permission for mortgage, registry, occupancy certificate (OC), Completion Certificate (CC) etc. The resulting deadlock has not been resolved in years. What was the committee set up to resolve the issue? On March 31, 2023, the Union Ministry of Housing and Urban Development constituted a committee under the Chairmanship of Amitabh Kant, the ex-CEO of Niti Aayog, and directed them to provide solutions for such legacy stalled projects. The committee held five meetings with various stakeholders and submitted its report on July 24. The Uttar Pradesh government deliberated on the report and approved its implementation in a cabinet meeting on December 19. On December 21, it issued a government order outlining the scheme and a phase-wise strategy for its implementation. Officials said that about 50 per cent of the recommendations of the committee have been accepted with amendments. How will the relief to builders work? As per the government order, the relief of zero period to the builder will be given, in view of the Covid-19 pandemic, from April 1, 2020 to March 31, 2022. The amount already deposited with the authority will not be returned. “After depositing 25 percent 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 the three 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,” reads the order. The builder will get permission to mortgage the land after the payment of 25% of the dues, so that they can mobilise the resources needed to complete the projects and pay remaining dues. The order also states that the developers whose projects are before the National Company Law Tribunal (NCLT) can choose this package to end the litigation and complete the project while clearing the dues. How many will benefit? According to the estimates of the Indian Banks Association, there are about 4.12 lakh stalled housing units (flats) across the country, of which about 2.40 lakh are located in the NCR. Data show that around 2.30 lakh flats are stuck in regions under three authorities in Gautam Buddha Nagar, and the maximum stressed projects are under Greater Noida Authority. This scheme may bring relief to around 67,000 flat buyers in Noida, 147,000 buyers in Greater Noida and 14,358 buyers in Yamuna Authority, who have been awaiting the registry and completion of their homes for many years. The order states that for flats in which families are staying, the registry, with or without occupancy certificate, should be completed within three months.
