Zero period for builders whose projects are stuck in litigation. Benefit only for developers who provide written assurance that they would complete housing units by June 30, 2021
Providing relief to stuck real estate projects located in Noida, Greater Noida and Yamuna Expressway, the Uttar Pradesh government on December 3 decided to excuse builders from penal interest and other dues for the period their projects were stalled due to litigation over land acquisition issues, if they provide a ‘written assurance’ that they would complete their projects by June 30, 2021.
Developers will be exempted from shelling out the penal interest and other dues if the housing project is stalled due to litigation, National Green Tribunal directions or a delayed deed execution. The zero period policy would also apply in cases where the developer was unable to begin construction due to absence of an approach road or the local authority's failure to acquire land in time, sources said.
The decision to allow the zero period benefit to builders was taken at a meeting in Lucknow of the state cabinet chaired by Chief Minister Yogi Adityanath.
“Builders can avail of this group housing scheme only if they give a written assurance that they will complete their housing projects by June 2021,” sources said.
The Cabinet also decided to clear 14.95 km of Metro network from Sector 71 to Knowledge Park through the Gaur City roundabout, they said.
“The benefits of zero period provided to the real estate developers will be deemed cancelled if the scheme is not completed by June 2021,” sources said.
Also, if the project is not completed in time then the concerned authorities will levy a penalty for every year of delay on the developer. As per the scheme, the period of construction will automatically get enhanced for the time the zero period is being given, they said.
For developers who do not take sufficient steps to complete projects, the authorities can step in and bring in a co-developer to finish the work, sources said.
Under the scheme, a developer cannot charge interest from buyers for the zero period benefit granted by the government, sources said.
“This scheme will benefit at least 1 lakh housing units that are expected to be completed by June 2021,” said Manoj Gaur, Managing Director, Gaursons and Chairman, affordable housing committee, Credai (National).
"It will also ensure that many more projects will become networth positive to qualify for the Rs 25,000 crore stressed fund. These will also have a positive impact on the overall sentiment in the region,” he told Moneycontrol.
“This is a welcome step by the UP government. It emphasizes the commitment of the government to revive the real estate sector and provide benefits to homebuyers who have been waiting to get their dream homes for long,” said Gaurav Gupta, joint secretary, Credai NCR.
This is a welcome decision and was long overdue. Many a time litigations are filed on frivolous grounds, but it nevertheless holds up and delays the entire project. The burden of it falls on both developers and buyers as their effective cost increases. In this context, it a welcome respite for all the stakeholders, said Deepak Kapoor, Director, Gulshan Homz.
The package received mixed reactions from homebuyers. While some buyers have welcomed the move, others said the government schemes, both the stressed asset fund worth Rs 25,000 crore and the package announced by the UP government have nothing in it for buyers who are stuck with units in projects by Amrapali Group, Unitech or for that matter Earth Infrastructure.“None of these schemes addresses the concerns of buyers invested in these heavily stuck projects,” said Indrish Gupta, Founder, NEFOWA.Are you happy with your current monthly income? Do you know you can double it without working extra hours or asking for a raise? Rahul Shah, one of the India's leading expert on wealth building, has created a strategy which makes it possible... in just a short few years. You can know his secrets in his FREE video series airing between 12th to 17th December. You can reserve your free seat here.