Centre issues advisory to states on extending RERA deadline for projects

Acting on the central advisory, Rajasthan Real Estate Regulatory Authority extends deadline for projects by a year.

The Centre has issued an advisory asking real-estate regulators in states and union territories to extend by at least six months the deadline for completion of projects in the face of the coronavirus outbreak.

The outbreak of COVID-19, the respiratory illness caused by the coronavirus, be treated as an “act of God” and a “force majeure” event under the Real Estate Regulatory Authority (RERA) Act, the housing and urban affair ministry said in the advisory issued on late on May 13.

The deadline for RERA projects that were registered or were to be completed by or on March 25 be extended, it said, giving relief to the stressed sector.  The advisory came a few hours after Finance Minister Nirmala Sitharaman told media that the deadline would be will be extended.

"To safeguard the interest of all stakeholders including homebuyers, CAC after detailed deliberations made unanimous recommendation to invoke the 'force majeure' clause by Real Estate Regulatory Authorities to extend the registration of projects registered under RERA," the advisory said.

The RERA Central Advisory Council (CAC) held an urgent meeting via webinar on April 29.

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"...Regulatory Authorities may, in pursuance of section 37 of RERA read with other enabling provisions, in their respective jurisdictions issue following orders/directions to the effect that 'notwithstanding anything contained to the contrary and by virtue of powers conferred under section 37 read with section 34 (f)of the RERA, the registration or extension thereto under Section 5, 6, 7 (3) of the RERA or rules thereunder, all registered projects under jurisdiction of regulatory authority for which the completion date or revised completion date or extended completion date as per registration expires on or after 25th March, 2020,” the advisory said.

The nationwide lockdown that kicked in on March 25 has paralysed construction activity with a restriction on the movement of people and disruption of supply chains. Some of the restrictions have since been eased.

The regulators, the ministry said, could extend by another three months the date of completion, if needed. They can also issue fresh “project registration certificates” with a revised timeline at the earliest.

The measures would safeguard the interest of homebuyers who will get their flats though delayed by a few months but the steps would ensure completion of the projects, the ministry said.

“No individual applications will be needed to get this extension. Regulatory Authorities will issue fresh ‘Project Registration Certificates’ with revised timelines for such projects which were due to be completed anytime or extended to be completed after 25th March, 2020. Further, all timelines for compliances will get changed concurrently,” the statement said.

Delay in the delivery of flats has been a huge problem that has seen homebuyers go to the Supreme Court, which has intervened on more than one occasion.

Under the circumstances, the primary objective was to address the concerns of homebuyers by ensuring a suitable relief to the developers for completion of projects to create a "win-win situation" for all the stakeholders, the ministry said.

Developers, too, have been seeking relief from the government as work on projects was halted after the lockdown that led to a large-scale migration of labourers to their native places.

"Further, there was a large-scale disruption in the supply chain of construction material, which adversely impacted construction activities across the country.

"It is also anticipated that construction activities in pre-monsoon could not be undertaken, which will further delay the construction cycle," the ministry said.

Due to the impending monsoon season, followed by festivals such as Dussehra, Diwali and Chatth, labourers were not expected to come back soon, the ministry said.

“This measure will save the projects and enable the developers to complete the projects within the revised timelines, thereby safeguarding the interest of homebuyers,” the ministry said.

Rajasthan first off the block

The Rajasthan Real Estate Regulatory Authority has issued an order extending by a year the deadline of projects registered before March 19, 2020, waiving off the fee for the extended period.

However, the fee prescribed by RERA on August 16, 2019, will have to be paid, the order, a copy of which is with Moneycontrol, said.

The certificate for the extended period for completion of the project will be made available online.

"Being on the ground of force majeure, the aforesaid extension will be in addition to the extension already granted or that may be granted to a project under the First Proviso to section 6 or under section 8 of the Act," it said.

Developers don’t have to put out the mandatory quarterly project reports on the regulator's website till March 2021. Developers won’t face harsh action till March 31, 2021 for not implementing refund orders, it said.

Developers will be able to divide projects into more than one phase and amend building plans so that the interests of the allottees are not affected.

All changes will require the nod of at least two-thirds of the allottees, the order said.

RERA was brought in to regulate the real sector in 2017, with states allowed to draw up their own rules under a broad framework laid out by the Centre.
Vandana Ramnani

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