CREDAI NCR wants state development authorities to be brought under RERA as 'promoters'

The Confederation of Real Estate Developers' Association of India (CREDAI), NCR, has demanded that various state development authorities be brought under the ambit of the Real Estate Regulatory Authority (RERA) and be treated as “promoters” for their land allotment schemes, so that their accountability can be fixed.

On May 5, CREDAI, NCR, appealed to the Uttar Pradesh Real Estate Regulatory Authority (UPRERA) to register and regulate the various state development authorities, such as the Noida Authority, the Greater Noida Authority, etc, under the Real Estate (Regulation and Development) Act, 2016.

The developers’ body said that once the registration of allotment schemes of state development authorities is made mandatory they will have to adhere to the RERA’s timelines, which will result in buyers getting their homes on time.

Gaurav Gupta, Secretary, CREDAI-NCR, said the move was prompted by several instances where land was allotted to the developer but possession could not be given because of encroachment or other issues, causing a delay in the completion of the project.

He said that whenever a project gets delayed either due to faulty land acquisition by the Authority or encroachment of land, the developer is held responsible and homebuyers suffer, while no accountability is fixed on the state development authorities.

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“It is the responsibility of the Authority to provide us land which is free of all encroachments and other hurdles, but in many instances that is not the case. For instance, in Noida, builders buy plots from the Noida Authority, but when they go to take possession they find that 20 percent or 30 percent area is encroached upon and possession of the entire land is not granted. Because of this, developers are unable to fulfil their obligations and they are fined,” Gupta added.

Bringing such state development authorities under the ambit of RERA and fixing their accountability in such cases is necessary, he said.

The state development authorities in Uttar Pradesh include the New Okhla Industrial Development Authority (NOIDA), Greater Noida Industrial Development Authority (GNIDA), Uttar Pradesh Avas Vikas Parishad (UPAVP), Kanpur Development Authority (KDA), Lucknow Development Authority (LDA), and others. These authorities allot parcels of land to builders for developing group housing projects, townships, and sports cities (residences with sports facilities available in and around the premises).

In the letter to the UPRERA Chairman, CREDAI NCR said under the present RERA regime, such allotment schemes are to be treated as “real estate projects” per Section 2 (zn) of the Act, and development authorities are to be considered “promoters” per Section 2 (zk) (iii) of the Act.

Manoj Gaur, President, CREDAI, NCR said it has been observed that the failure of development authorities to register under RERA at times results in delays in fulfilling obligations per the terms of the scheme, such as timely possession of the allotted land, and timely provision of essential services and basic external infrastructure.

“If the land, along with the promised development by the state authorities, is not delivered within the stipulated time, the developers fail to honour their commitments to their customers. As a result, in spite of not being at fault, they are penalised per the provisions of the RERA due to the acts of omission and commission of the development authority,” he added.

In its representation, CREDAI, NCR, has stated that the Noida and Greater Noida Authorities are also parties to the tripartite sub-lease deed executed in favour of allottees. It indicates the complete control of the authorities on each and every transfer, development, and construction. Thus, the authorities should be categorised as “Promoters” under the RERA Act, they demanded.

All plots or flats in Noida are currently sold on a leasehold basis. The buyer is given the flat or plot on lease for 99 years, and is required to pay a certain sum for the same.

Recently, the UP government had directed development authorities not to launch any plot allotment scheme until the land had been completely acquired as per the law.

CREDAI has also requested the UPRERA to direct the authorities, including NOIDA, GNIDA, and Ghaziabad Development Authority (GDA), to register under RERA all projects where completion certificates of the plots in favour of the developer have not been granted till date.