A day after the UP government announced a scheme to address woes being faced by the real estate sector of Noida and Greater Noida, the Yamuna Expressway Industrial Development Authority (YEIDA) on Wednesday said it will implement it soon.
“…Now the state government will issue a government order and send the same to us on this. Once we receive the GO (government order) in the next four to five days, we will do the needful,” said Lokesh M, chief executive officer, Noida Authority.
The Greater Noida authority’s additional chief executive officer Saumya Shrivastava and Yeida chief executive officer Arun Vir Singh too agreed to implement it in the coming days.
The realtors, defaulting in making the payment of the housing land cost dues, will have to pay at least 25 percent of it to obtain permission for registry, mortgage permission, map approval, additional time to develop the project, and other benefits as per the government’s scheme.
The scheme is meant to resolve the issues in all realty projects.
In case, a developer doesn’t make use of it or is unable to pay up even 25 percent, his assets are to be seized and the government will take over the project, as per the UP government.
The scheme’s provisions suggest if a developer defaults to pay ₹100 crore in a stalled realty project, he will have to pay ₹25 crore upfront to be eligible for the multiple benefits that include permission to execute registry in the buyers’ name, mortgage permission, and an additional time to build. He will have to pay ₹75 crore of the remaining defaulted amount within a year.
In case, this defaulted amount stands between ₹100 -500 crore, the defaulter realtor will have to pay 25 percent of the total dues, officials said.
He is bound to pay the remaining 75 percent within two years. But if the defaulted amount is above ₹500 crore, the defaulter realtor will have to pay 25 percent of the total defaulted amount, and the remaining 75 percent component within three years, they added.
“The UP government has approved this scheme to address the issues in all stalled realty projects impacting at least 3.5 lakh homebuyers,” said Manoj Kumar Singh, Uttar Pradesh additional chief secretary and UP infrastructure and industrial development commissioner.
“If any developer fails to make use of this scheme and cannot even pay 25 percent of the dues now to become eligible for the benefits, the respective authority will seize the commercial and other assets to recover the dues paving way for the registry of the homebuyers,” Singh, who is also chairman of the Noida and the Greater Noida authority, added.
In Greater Noida, there are at least 124 stalled housing projects owing around ₹14,000 crore land cost dues. In Noida, these realty projects are around 150 owing around ₹50,000 crore land cost dues, and around 20 projects are in the Yamuna E-way area with dues of around ₹10,000 crore, officials stated.
The scheme, meanwhile, will not cover those realty projects that are pending in any court like high court, Supreme Court or national company law tribunal, said officials.
New Scheme Cheers Realtors, Home-Buyers
Realtors expressed hope that the scheme will help the sector revive.
“The UP government’s action is advantageous for the real estate industry because it benefits both developers and buyers. With this change, developers will be able to bring in co-developers for their individual projects that have stalled, resulting in timely deliveries,” said Himanshu Garg, Director, RG Group, a realty firm.
As per Ajay Chaudhary, CMD, Ace Group, as the prices in the realty sector have seen major upswing, “now the realtors are in a position to arrange funds and clear the same” as the new policy waives off penal interest paving way for the registry of the flats. “This scheme will not only benefit the buyers but also the investors and the realtors as whole.”
The home-buyers also welcomed the scheme, but wished it be implemented without delay.
“We hope that the new scheme’s details will be shared without any delay, and it will be implemented as well on the ground to benefit home-buyers,” said Abhishek Kumar, president, Noida Extension flat owners association.
The UP government, meanwhile, has also warned the builders that they will have to pass on the zero period benefit (under which no interest will be charged) to the home-buyers since the state has waived off all kinds of interest penal or simple interest for around two years due to Covid pandemic.