Greater Noida West: The Uttar Pradesh government waived off penalties and cut down the interest applied on dues by real estate developers, paving the way for thousands of homebuyers to be able to register properties in their name.
A decision to help homebuyers
In a statement, the government said that it had accepted some recommendations of a central committee headed by former Niti Aayog chairman Amitabh Kant, and will allow property registrations to take place if real estate companies clear 25% of their dues, which in itself was shaved off significantly as the government removed the penal interest applied between April 2020 and March 2023.
240,000 and 350,000 unfinished housing projects will be finished
The decision will likely help a large section of home buyers in Noida, Greater Noida and Yamuna expressway areas, where estimates put the number of stalled and unfinished housing projects between 240,000 and 350,000.
While a large part of these stuck units are simply unfinished, many of these are where the builder has completed projects but has not settled land dues to the regional authority. It is only when these dues are cleared that the authorities hand out what is known as completion and occupancy certificates, which are required for a homebuyer to be able to register a property.
Real estate companies will pay up the 25% dues
If only cases where people have received possession of their properties but have not been able to register them in their names are considered, this decision will benefit 165,000 homebuyers if their real estate companies pay up the 25% due.
The three authorities in Gautam Budh Nagar district are struggling to recover at least ₹70,000 crore in the form of land cost dues from around 400 realty projects. In most cases, the promoters have cited financial crisis for being unable to complete the projects or settle the dues.
The decision will also help bring stalled projects back on track, an official said, “The UP government has waived off the penal interest, a demand raised by the real estate sector for a long time. Now the developers defaulting on payments can pay 25% of the total defaulted amount and get permission for registry, mortgage and map approval, etc. so that stalled housing projects can be revived and delivered to the homebuyers,” said Manoj Kumar Singh, additional chief secretary and UP infrastructure and industrial development commissioner, who also holds the charge of chairman of the Noida and the Greater Noida authority.
“With this scheme all stalled projects will see a solution and homebuyers will get justice. It is a major decision taken in the interest of the homebuyers and other stakeholders of the sector,” added Singh.
The central committee led by Kant had on August 21 proposed that penal interest be waived off for the April 2020- March 2023 period due to the effects of the pandemic. This was one of the recommendations that was accepted, although it will not apply to commercial, entertainment or recreational projects, including a group housing scheme named Sport City, UP finance and parliamentary affairs minister Suresh Kumar Khanna said.
The authorities have now decided that in addition to the three-year waiver, it will also calculate dues at an 8.5% interest rate, a move that will significantly shave off the amount owed.
The Noida and the Greater Noida authorities said they expect to witness a 30% loss in revenue with the new scheme.
Abhishek Kumar, President, Nefowa says, “We hope that the new scheme details will be shared without any delay and then it will implemented too to benefit homebuyers,”
Rajiva Singh, President of NOFAA says, “It’s a welcome step because the apartment owners have suffered a lot in the past several years due to non-registration of flats. Even in old societies, thousands of flats are without registry due to default by realtors. We hope this new scheme will fix the issues now.”
To be sure, there are 15 realty projects in Noida and 16 in Greater Noida that are in bankruptcy proceedings – these will not be covered.
Some major projects, such as those of the Amrapali, Unitech and Ansal groups, too, will not be covered since they are in litigation at various courts.
Realtors and analysts largely welcomed the decision
Santosh Kumar, Vice Chairman of Anarock Group, says, “The UP cabinet’s approval of the recommendations of the Kant committee will bring much relief for aggrieved buyers.”
Mihir Gautam, a Homebuyer and member of Nefowa says, ” The decision of UP government is welcome. But the houses of lakhs of home buyers are stuck in NCLT. If they also get relief from this decision, it will be a very bold decision. The Cabinet of the Uttar Pradesh Government has approved the recommendations of the report prepared by Amitabh Kant Committee for home buyers. However, it is not yet clear whether the entire report has been accepted or whether only some parts have been agreed to. This will be a big relief for those home buyers who were supposed to get a house in 2013 but did not get the house till 2023. This also includes those who have taken houses, but to date, their houses have not been registered. Those home buyers are also included, whose money the builder ran away with. Now we will have to wait a little to know how many people have got relief from the decision of the Uttar Pradesh Cabinet.”
Jyoti Jaiswal, Homebuyer and Nefowa member says, “First of all, thanks to Honorable Yogi ji who held continuous meetings with Nefowa and listened to their problems. Success has been achieved and this is the victory of all of us buyers who have been protesting peacefully at a statue for the last 53 weeks. In this, Mihir Gautam and Abhishek Kumar have been the main support of all the associates of Nefowa, who believed that their words would be accepted. With Nefowa, we buyers will never have bad luck, they will always be with the buyers. Think for the benefit. And in the end, I would like to say that the struggle will continue until Noida Extension is transformed.”
Dipanker Kumar, Homebuyer and Member of Nefowa says, “We are waiting for the full report, neither happy nor sad, just waiting for the report”
Ranjana Suri Bhardwaj, Member of Nefowa says, “Good news for all of us. Thanks to nefowa and the people of Greno West who continuously Protested at Ek Murti despite odd even climatic conditions. Moreover report of Amitabh Kant will be implemented which will be good for all buyers. We do have hope Amitabh Kant’s report will bring positive change. It has been a long people have been fighting for Registry and other issues”
Dinker Pandey, a Homebuyer and member of Nefowa says, “The decision to implement Amitabh Kant committee report, by UP government is commendable and going to fulfil long pending demand of Home Buyers. We categorized projects in multiple categories and recommended working on a project-specific plan to facilitate registry/completion.”e
He continues, ” We Hope the Government has taken a decision accordingly. Before Celebrating we’ll wait for a detailed order from the government and look for action on the ground. Vibes are positive, and we hope the registry will start immediately for projects where OC has been issued or Buyers have taken possessions. For the Rest of the projects, there would be a significant endeavour to ensure construction commences soon.
We also recommended keeping real estate projects out of NCLT or modifying insolvency law if real estate projects need to be there. Hope some action would be taken by Central/State government in this regard also in future.”
Sameer Bhardwaj, Member of Nefowa says, “Congratulations to Greno West People who always kept faith in Nefowa and joined hands in every protest continuously at ek murti and jantar mantar. We all are winners. The fight will continue till our Problems are not resolved completely.”
Annu Khan, President, Nefoma says, “It is a happy decision for lakhs of flat buyers who have been searching for ownership rights for the last decade, but it also has to be seen that builders will have to deposit 25%, after that OC/CC will be issued and after that the process of registration is likely to start.
Secondly, many builders like Supertech, JP, Amrapali etc. have gone into insolvency, so how will their 25% deposit be deposited? This is a big question. The registry should be for everyone, no matter which project they are living in or flat buyers. What is the mistake?”