New Delhi: In a bid to provide relief to lakhs of homebuyers, a high-level committee of experts has recommended that registration of property or execution of sublease in favour of homebuyers should be allowed immediately, and possession be given on “as is where is basis” in substantially complete projects, irrespective of recovery of “dues” from builders.
The 14-member committee, headed by former NITI Aayog chief executive officer and India’s Sherpa at G20 Amitabh Kant, submitted its report to the Union Housing and Urban Affairs Minister Hardeep Singh Puri Monday.
The ministry had constituted the committee to suggest ways to provide relief to lakhs of homebuyers by expediting the completion of housing projects stalled due to the financial troubles of builders.
According to the Indian Banks’ Association, more than 4.12 lakh “stressed dwelling units” worth Rs 4.08 lakh crore exist across India, of which around 2.4 lakh units are located in the National Capital Region (NCR), mainly in Noida and Greater Noida.
Real estate experts say there are several stressed projects in which homebuyers have been given possession but they are unable to get their property registered with the government authorities.
While recommending that strict action should be taken by the government authorities to recover “outstanding dues” from builders, the committee pointed out that homebuyers are adversely affected despite fulfilling their obligations.
“The committee strongly recommends immediate registration/execution of subleases in favour of these rightful homebuyers. This should not be contingent on the recovery of dues from builders. This would benefit approximately one lakh homebuyers,” it stated in its report.
It added that in cases where homebuyers are expected to remit “outstanding dues” to the builders, “RERA (Real Estate Regulatory Authority) should directly collect these payments from homebuyers, bypassing the builders”.
The committee also noted that in several housing projects, construction work is “substantially completed” but possession to homebuyers is yet to be given due to administrative hurdles, such as procurement of no-objection and completion certificates.
It has suggested that states’ RERA should identify such projects within the next 30 days.
“The allottees may be given the option to take possession of these units on ‘as is where is’ basis. The allottees could get the interiors of their home finished from the balance funds which they have not paid. Once identified, efforts should be undertaken to expedite the clearance process, including occupation and completion certificates for these projects, ensuring that the necessary approvals are granted promptly and efficiently,” it said.
“This should not be contingent on the recovery of dues from the builders. This process should be completed within six months to avoid any further delays. Once units are handed over, registration/sub-lease should be done,” the committee further recommended.
Balvinder Kumar, a former member of the Uttar Pradesh RERA, told ThePrint: “The committee’s recommendations are subject to acceptance by the central government and state authorities. The Noida and Greater Noida authorities have to accept the recommendations first, as it might result in loss to the government as builders are yet to clear dues.”
Also Read: Greater Noida is a graveyard of great Indian middle-class dream. Can buy home, but can’t own
‘Model package’ for Noida and Greater Noida
The committee has recommended a “model package” for Noida and Greater Noida — where nearly 58 per cent of stalled housing projects are located — that can be adopted by other states as well.
As part of this, it suggested, the Uttar Pradesh government “may announce a rehabilitation package aimed at bolstering financially distressed, incomplete projects”.
“The package should be designed to make the projects financially viable. Developers adopting this package would have to commit to a three-year (project) completion timeline. The state RERA will set quarterly project targets and oversee progress according to the RERA Act,” it said.
The model package further includes a “zero period”, when construction work was affected during the Covid pandemic, and a period when court orders had led to suspension of projects within a 10 km radius of the Okhla Bird Sanctuary, for which builders will not have to pay interest on penalty payments.
The panel has recommended that plans be approved and extension be given “without requiring clearance of dues”. “A fresh three-year extension may be given to all projects at no payment to the authority,” the report said.
The panel has also proposed a flexible policy that allows developers to partially surrender the land.
“This will give developers a greater degree of flexibility to adjust their commitments based on their operational capabilities. All dues on the surrendered land will be waived. The authority may adjust money already paid for surrendered land with outstanding dues of the developers. Land costs have increased in the past 10 years. The authority will be more than compensated by selling the surrendered land to fresh allottees,” said the report.
To increase the efficiency and effectiveness of the insolvency resolution process, the committee has recommended that five additional fast-track benches be created at the National Company Law Tribunal.
“These benches should be created for a period of three years and should dispose of all pending Insolvency & Bankruptcy Code real estate cases on a priority basis,” the report added.
(Edited by Nida Fatima Siddiqui)
Also Read: GreNo is Greater Noida’s new upmarket tag. It’s no more a step-sister to Noida