Uttar Pradesh Real Estate Regulatory Authority (UPRERA) has said real estate developers ‘serious’ about completing and delivering projects by June 2021 may not be required to refund the amount deposited by homebuyers.
“We have decided that builders who are serious about completing the projects, notwithstanding the duration of delay till date, within one year up to June 2021, may not be required to refund the amount to homebuyers,” said UP RERA member Balwinder Kumar.
“We are currently inspecting such projects and would be drawing up a list of such projects in Noida and Greater Noida soon,” he told Moneycontrol, adding developers would have to submit an affidavit stating that they would be delivering the project within a year.
As many as 80 percent of projects in Noida and Greater Noida are nearing completion. The one-year timeframe being considered for ‘serious’ builders includes the six-month extension provided under RERA.
UP RERA had in May decided to extend the deadline for completion of real estate projects by six months in the face of the coronavirus outbreak. The deadline for RERA projects that were registered or were to be completed by or on March 25 was extended.Also Read: Coronavirus impact | UP RERA extends real estate project timelines by six months
Developers who fail to give possession within a year, a penalty of MCLR plus 1 percent would be imposed, he said.
Till date, UP RERA has refunded around Rs 96 crore to homebuyers.
Also Read: UP RERA identifies 25 erring developers; plans to auction their unsold properties to recover Rs 500 crore
Homebuyers, however, are unhappy about UPRERA’s decision not to grant a refund to homebuyers desirous of seeking it.
Abhay Upadhyay, president, member Forum for Peoples' Collective Efforts (FPCE), said that refund cannot be denied to homebuyers on any ground whatsoever. Even the Supreme Court has held that homebuyers are entitled to refund in case of unreasonable delay.
“Statements that refund will be denied to homebuyers if a project is completed within next one year even if that project is hugely behind schedule is not only against RERA but also against the settled stand taken by the apex court. This is highly arbitrary and is being done with the objective to favour builders,” he said.
Meanwhile, real estate body NAREDCO has urged the Uttar Pradesh Real Estate Regulatory Authority (RERA) to grant a 12-month extension for completing construction projects in the state citing issues such as disruption in the supply chain of material, migrant worker exodus, among others following the outbreak of the pandemic.
These issues have pushed back construction in real estate projects by about 18 months, it said in a letter to UPRERA.
“There is no sign of an end to the pandemic as the number of positive cases are increasing day by day. Further, there was an unexpected exodus of migrant labourers in large numbers from real estate projects to their native states. Also, the supply chain of materials and equipment from different parts of the country, has been badly impacted due to the lockdown restrictions,” said RK Arora, president of NAREDCO-UP in a letter addressed to UP RERA Secretary Abrar Ahmed.
In order to start construction in normal speed, the labourers have to be brought back and the supply chain of raw materials restored and above all the pandemic situation need to be eased. It is, therefore, very clear that the “force majeure” situation is continuing for some more time for which further time extension to project completion dates need to be allowed by UPRERA, Arora said in his letter to UP RERA.
UP RERA has identified 25 defaulting real estate developers in the state, issued recovery certificates against them and now plans to auction their properties to recover the homebuyers’ money amounting to over Rs 500 crore.
Last week, UPRERA held discussions with at least 25 builders in the defaulter’s list. The regulator had demanded that defaulting builders disclose their assets that can be auctioned.
“We will meet again after a week and decide how to proceed towards attaching their properties,” Kumar said.
The regulator has also decided to upload the compliance reports of defaulting developers on its website.