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Noida Policy for rescheduling dues payment by builders gets approval

By Rishabh Chamoli | 2023-01-04

The Greater Noida Industrial Development Authority (GNIDA) and Noida Authority have cleared a new policy for rescheduling dues payments by developers. This move would provide relief to builders to clear their past dues, which are more than Rs 39,500 crore.

Acting on appeals from real estate builders to the Authorities in Greater Noida and Noida for relaxation in payment terms, the authorities have approved a new policy. As per the new terms, approved on December 28, 2022, developers will get more time as their pending dues will be rescheduled by the Authority. About 235 housing projects in Noida and Greater Noida have defaulted on their owed sums to the respective Authorities. With this move, Greater Noida Industrial Development Authority (GNIDA) and Noida Authority aim to recover more than Rs 39,500 crore in dues, generating funds for their new projects and effective administration.

The new rescheduling policy
The new amnesty policy will be applicable from January 1, 2023 till March 31, 2023. It will apply to sports city, group housing and other commercial schemes.

As per the new policy, any outstanding amount to the Authority concerned will be rescheduled for only two years. This amount will aggregate the original sum owed to the Authority, lease rent, additional compensation and interest payable.

As per the new norms, when the letter of rescheduling the payment is released, developers will have to pay 20 percent of the outstanding sum within a month. Further, if a builder defaults on two instalments, the Authority will cancel the land lease without intimation.

A consequence of a Supreme Court order
On November 7, 2022, the Apex Court recalled its 2020 order which had restricted Authorities not to exceed the rate of interest of eight percent for delays in payment by developers. This order was a setback to builders, who now have to pay higher interest rates to Authorities. Subsequently, the real estate players approached the authorities for some relief. With the new policy in place, developers will have clarity on payment schedules.

Relaxation of time extension charges in Greater Noida
In another relief, the GNIDA has approved a relaxation policy for time extension charges levied on builder plots. Industry bodies had requested the Authority to make some relaxations to these charges. In the case of new allotment, the time extension for the entire project will be up to a maximum of 13 years from the execution of lease deed and up to 15 years for old allotments. As per the new proposal, there will be no extra charge for seven years upon project completion. But, a charge of a percent will be applicable from the eighth year. With every passing year, the penalty will increase by a percent till 15 years.

Benefits for homebuyers
Both these policies approved by the Authorities in their board meetings are positive news for homebuyers. With builders clearing their dues with the Authority, the work pace on projects could also speed up. With an augmented income, the Authorities will also be able to spend more on developing the twin cities. Further, the pace of registries of apartments could pick up once the issue of pending dues is settled.

The relaxation of time extension charges will affect 1.57 lakh buyers in housing projects in Greater Noida, where construction is either completed or pending.

Apart from the new policy on rescheduling dues, the authorities in their board meeting also approved policies related to pets in housing societies, the structural safety of buildings, the FAR policy for data centres and the extension of the Noida Metro.