UP panel’s plan an ‘eyewash’ or a ‘solution’? Homebuyers want more answers

While some home buyers are hopeful that they may get their homes for which they have been waiting for years once the action plan announced by the three-member panel consisting of top Uttar Pradesh ministers is implemented, others have termed it as an “eyewash”, a “lollipop” and called for a plan in ‘writing’ and more confidence building measures by the government.

Buyers also want clarity on issues such as whether they should continue paying EMIs, who will take up their particular project, how will the completion be funded and what happens if the projects do not get completed within the newly set two-year deadline.

“Will the co-developer be liable to pay homebuyers a penalty in case the new timelines are not met,” they ask.

“By getting in another co-developer, we may be getting into the same vicious circle as there is no guarantee that the developer who will take over the project will complete it. Ideally, the government’s construction arm should have been brought in to finish these projects,” they say

A high-level three-member panel, in its action plan, has given a two-year deadline to Amrapali group to finish its 10 incomplete residential projects in Noida and Greater Noida. It has said that the co-developers will be brought in to complete the delayed projects and assured home buyers stuck in Amrapali and Jaypee projects not to pay any outstanding amount until flats are completed.

Urban housing minister Suresh Khanna, Industries minister Satish Mahana and state minister (independent charge) of cane development and sugar mills Suresh Rana are the members of the committee that had held marathon meetings with both buyers, builders and the four authorities in Noida, Greater Noida, Yamuna Expressway and Ghaziabad. The three-member panel had been formed on the directions of Uttar Pradesh chief minister Yogi Adityanath to address issues being faced by home buyers.

Buyers say that there is no formal written action plan yet. There is no clarity on which builder will take over which project and the number of houses that will be completed within a certain timeframe? Also, since buyers do not have to pay anything until possession, who will fund the completion work and who will be held responsible if these are not completed. What will be the penalty due to buyers if projects are not completed within two years?

“Ideally developers should be putting up revised schedule on the website with the new timelines and a legal undertaking to the government that the projects will be completed by a certain date and the penalty to be paid in case these are not delivered,” says SK Nagrath, president Jaypee Aman buyers' welfare association.

The panel has said that builders can get in co-developers to complete the unfinished projects. Confederation of Real Estate Developers' Associations of India (CREDAI), an apex body of private real estate developers, has offered its support to be part of the resolution process concerning unfinished apartments by Amrapali Group.

Buyers say that “bringing on board a government agency such as NBCC to complete these projects would have been perfect and want that a government official should be involved in the day-to-day supervision of these projects.”

In the past, co-developers were brought in by an embattled developer but it failed to complete the project. We, therefore, want the government’s involvement in this case and a guarantee, says Indrish Gupta, co-founder, Noida Extension Flat Owners Welfare Association.

Also read - Respite for home buyers of Amrapali, Jaypee: UP panel comes up with resolution plan

“Even if a co-developer comes in, buyers have the right to know the developer’s financial status, does he have the wherewithal to complete construction. If they are hoping to realise some funds by selling unsold inventory, who will buy those units in a slow moving market. These are some of the questions that require answers,” he says.

Moneycontrol had earlier reported that the government’s construction arm, NBCC, is open to completing Jaypee Infratech's pending projects as a project management consultant if instructed by the government.

Some buyers say that the so-called resolution is a complete “eyewash”. There is nothing more left to be paid to builders by buyers as some of them have paid almost 90 percent to 95 percent of the total cost of the house. “The payment that is left to be paid to the builder is in most cases only about 5 per cent and will be paid only when pre-possession letters are issued and that can happen only once the flats or towers are complete,” say buyers.

The claim that the builder has promised to deliver 6000 flats a year is a “bogus resolution,” they say. “Jaypee has over 29,000 flats that are yet to be completed and it may take them another five years to complete all the projects. Why should we wait for another five years after having waited for so long – in some cases almost nine years,” asks Nagrath.

Buyers also want to know why they should continue paying EMIs when they are not sure about getting a completed house. “What is the guarantee that I will get a completed flat. And since there is no assurance, why should I pay EMIs as well as rent. That’s a double whammy,” says  Dipanker Kumar, an Amrapali buyer.

Nobody seems to be asking the most pertinent question – where has all the money gone? Why has there been no financial audit? Homebuyers had demanded earlier that an audit of the partially completed housing projects should be done and alleged that some builders had diverted funds collected from them to other projects, causing delays.

At a meeting with the three-member committee on Wednesday, buyers had pressed upon the panel to order a forensic audit of each of the builders’ accounts.

“We demanded that a forensic audit of each builders’ accounts should be done to assess the amounts that have been siphoned-off and due to which projects have been delayed,” said Rajiv Nijhawan, another buyer. The objective of the audit is to ascertain whether the builder diverted the funds collected from buyers to other housing projects/businesses.

Another buyer said that even though the builder had offered possession of their units way back in 2011, they were unable to get their houses registered because the builder had failed to receive a completion certificate from the authority.

So, who will register the flats that are completed after two years if dues to the authority are not paid by the developer, ask buyers.

To make a housing project eligible for occupancy certificate (mandatory formality before executing the registration of a flat buyer, realtor and the authority), a developer has to clear financial dues. Most real estate developers have cited a dip in sales and the overall slowdown in the market as the reason for not clearing the dues.

Some buyers said that there is a need for more confidence building measures on the part of the developers. “They should open an escrow account for each of the projects that have to be completed. The amount required to complete the projects must be mentioned and put up on the company’s website,” says Nagrath, adding “we are not convinced about the roadmap yet because of the track record of the developer. If the developer puts up all the details on the website, credibility can be restored.”

vandana.ramnani@nw18.com