The Noida and Greater Noida Authorities have rolled out a rehabilitation package for developers of stuck housing projects in their jurisdictions, as per the recommendations of the Amitabh Kant committee. A move that will pave the way for registration of flats in stuck projects, government officials aware of the matter said.
The decision to roll out the rehabilitation package was taken in a combined board meeting of both the authorities where they decided to adopt the mandate issued by the Uttar Pradesh government on implementing the recommendations of the Kant panel. The Union government, in March 2023, had formed a 14-member panel headed by former CEO of NITI Aayog, Amitabh Kant, to address the issue of stuck housing projects.
According to a rough estimate of both authorities, there are around 2.4 lakh stressed housing units in Noida and Greater Noida, of which around 1.2 lakh flats are yet to be delivered. Possession has been given for the remaining 1.2 lakh units, but registries are still pending.
The rehabilitation package
According to officials of the Noida and Greater Noida Authorities, the rehabilitation package will comprise a zero period for developers where penalties and interest will be waived, payment of recalculated dues rescheduled so that registries can be executed within three months from now and co-developers policy implemented to complete stuck housing projects.
The package will also facilitate the grant of occupancy certificates (OC) and completion certificates (CC) from the authorities after payment of 25 percent of dues after the zero period.
Under the zero-period policy, the government can waive penal interest and other dues on projects mired in legal disputes or land-related issues. The policy will apply only if developers agree to complete the projects in a specified time. Thus, the penalties waived by the government will significantly reduce the total dues of the developers.
The zero period will be offered in two instalments - a two-year zero period for the duration between April 1, 2020 and March 31, 2022, due to COVID-19 disruptions faced by the real estate projects while the second will be a conditional waiver for another 22 months (2013-2015) that will be granted on a case-to-case basis for constructions halted by the National Green Tribunal.
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Under the package, realtors will also be given three years’ free time extension to complete projects. They will also be granted permission to mortgage a portion of the unused land of the project or unsold inventory of the project to source funds from the market.
What happens next?
According to spokespersons of the Noida and Greater Noida Authorities, both government bodies will soon start inspections of residential projects in their respective areas and gather a fresh account of information on unregistered flats, incomplete flats and apartments delivered so far.
The government has set a deadline of three months to start registration of flats where families are living without occupancy certificates.
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The authorities will soon engage independent CAs and begin an exercise of recalculation of dues after the implementation of the zero period benefits. The realtors will then have to pay the recalculated amount as per the reschedulement policy within a given timeframe. This exercise is expected to be completed within a month.
“Builders will have to pay 25 percent of the recalculated dues in 60 days and the remaining amount within three years. If the dues are up to Rs 100 crore, the repayment will have to be done in one year after the initial 25 percent down payment while dues up to Rs 500 crore have to be paid within two years. For cases where dues are beyond Rs 500 crore, a three-year time frame will be given for payment,” an official of the Noida Authority told Moneycontrol.
Once builders pay the initial 25 percent, the authorities will allow registries of flats that have been delivered but are yet to receive OCs.
Developers’ take
Manoj Gaur, President CREDAI NCR Chapter and CMD Gaur Group, said that the developers’ community welcomes the move. “This step will directly benefit more than 75 thousand homebuyers of Gautam Budh Nagar (in Greater Noida) as people will now be able to get their houses registered. This decision is quite positive for the real estate sector as it will increase the confidence of buyers, and they will invest in the sector without any worries,” he said.
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Deepak Kapoor, Director of Gulshan Group said, people will be able to get their flats registered at the earliest which will increase the confidence of prospective buyers towards investing in the region in the coming years.
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