Centre extends timeline for real estate project completions, registrations by 6 months

Finance Minister Nirmala Sitharaman (File image: Reuters)

To provide relief to real estate developers and ensure that homebuyers get their homes with new timelines, Finance minister Nirmala Sitharaman said on May 13 that the housing and urban affairs ministry will issue advisory to states and union territories to treat COVID-19 as force majeure.

States, union territories can suo moto extend registration and completion date of realty projects by six months if projects are registered on or after March 25.

“MoHUA India will advise states/UTs and their regulatory authorities to extend the registration and completion data suo moto by six months for all registered projects expiring on or after March 25, 2020, without individual applications,” she said.

Due to COVID-19, projects stand the risk of defaulting on RERA timelines. Timelines need to be extended, she said.

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The ministry of housing and urban affairs will advise states/UTs and their regulatory authorities to the following effect:

>Treat COVID 19 as an event of Force Majeure under RERA;
>Extend the registration and completion date suo-moto by six months for all the registered projects expiring on or after March 25, 2020 without individual applications;
>Regulatory authorities may extend this for another period of up to three months if needed, she said.

RERAs will also issue fresh project registration certificates automatically with revised timelines and extend timelines for various statutory compliances under RERA concurrently, she said.

“These measures will de-stress real estate developers and ensure completion of projects so that homebuyers are able to get delivery of their booked houses with new timelines,” she said.

“Extension of RERA timelines beyond lockdown period by six months will be a relief to developers who are not defaulting on project completion timelines”, said Piyush Gupta, Managing Director - Capital Markets (India), Colliers International.

“Providing a major relief to real estate developers, the government has extended the timeline for project completions and registration by 6 months. This is a big move that will de-stress developers significantly, since construction activity had been halted all across the country. Homebuyers’ wait for their homes will get extended by this move, but this was in any case inevitable,” said Anuj Puri, Chairman – ANAROCK Property Consultants.

Amit Modi, president-elect, CREDAI Western UP said that even though the extension of the timelines will help developers, specific steps are required to infuse liquidity into the sector.
Homebuyers said that the Force Majeure benefit should be extended to them too.

MS Shankar, General Secretary - Forum for People’s Collective Efforts, said, “While the force majeure benefit is extended to builders, in the same way homebuyers should also be taken care of suitably. The interest component of the loan should be waived as homebuyers are now facing job cuts, lack of job security and over and above that they have to pay rent.”

“The builders should bear the interest part till home-buyers take possession of his/her flat, as due to no fault of the buyer they are forced to pay both rent and EMI. The RERA Authorities, while utilising their discretion to extend the project, should direct the builders suo-motu to compensate the interest part of the EMI till possession of the flat is granted," he said.

"We applaud the decision of extending registration and completion dates, suo-moto, by six months, for all registered projects expiring on or after March 25, without individual applications. This is likely to boost the sentiments of the developers and help us tackle the issue on a stronger footing," said Prashant Solomon, MD - Chintels India and treasurer- CREDAI-NCR.