The Noida Authority has decided to apply a time extension charge on Jaypee Infratech Ltd (JIL) for all its projects, including Wishtown which has been incomplete for over a decade. The insolvency-ridden real estate company will now have to pay a fee if it wants a further time extension for its projects.
While all developers working in Noida used to pay time extension charges, the same was not applicable to Jaypee due to its concession agreement with the Noida authority. However, with the repeated delay in the project, the authority decided to levy the charge on Jaypee during its board meeting on August 11. While this is the first time that Jaypee will pay a time extension fee, it may recover the same from homebuyers, thus aggravating the plight of those who have been waiting for their homes for a decade.
According to a Noida authority official, Jaypee was given 500 hectares of land each at five places -two pockets in Greater Noida, one in Agra, and one each in Aligarh and Noida - in lieu of building the 25km-long Noida Expressway and the 165-km-long Yamuna Expressway. The official said that the Noida land parcel is spread across Sectors 128, 129, 131, 133, 134 and 151 and was given to Jaypee between 2003 and 2011.
"Now, there is a certain period to develop any land. One cannot be given any land for an indefinite period as prices keep increasing and they keep selling slowly to benefit from that. Now, the Noida authority has decided that March 2022 was their last extension and Noida authority would decide on any further extension to the Jaypee projects," said the official.
Also Read: UP RERA grants more time to promoter to complete Ghaziabad housing project
The Wishtown project is spread across Sectors 128, 129, 131, 133, and 134 while Jaypee Aman-I and II were constructed on Sector 151 land. The official said that the authority has now asked Jaypee to complete the development of these lands by December 31, 2025. He said that if the deadline of any Jaypee project expired before March 31, 2022, the time extension fee will be calculated from April 1, 2022.
While Wishtown has around 33,000 units, Jaypee has delivered around 12,000 units so far and the remaining units are yet to be delivered as the company went into bankruptcy in August 2017.
Ashish Mohan Gupta, president, JIL Real Estate Allottees Welfare Society, said that the Noida authority, being a public body, should have looked into ways to get the project completed rather than imposing any additional charge which in turn will be transferred upon the homebuyers. He said that the decision is like an insult to the injury that homebuyers have been facing for a long time.
"We booked our houses between 2009 and 2012. If the builder did not complete the project and now the authority is going to levy a charge for a time extension, then that charge will come to homebuyers either way. If the builder is at a fault, why should homebuyers bear the burden? The authority should have monitored the project for timely completion," said Gupta.
Also Read: 274 homebuyers of Jaypee Greens Kalypso Court to get flats after a decade
What is the time extension charge?
When the Noida authority leases its land to any party, it defines a timeline under which the project has to be completed. In case the project misses its deadline and the developer wants additional time, the Noida authority grants that in lieu of certain predefined charges.
During its board meeting on August 11, the authority also modified its time extension policy. Earlier for group housing and residential plots, it used to charge 4 percent in the first year and increase it by one percent every year till the sixth year and then 10 percent per year for the seventh to the tenth year. Now, it will charge one percent in the first year, and two to 10 percent between the second and tenth year. After 10 years, it will charge 10 percent per year.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
