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UP Rera Proposes Delinking Flat Registry from Builder Dues for Homebuyer Relief

By Rishabh Chamoli | 2023-06-09

The Uttar Pradesh Real Estate Regulatory Authority (UP Rera) has recommended to the state government, urging the separation of flat registry in completed real estate projects from the outstanding debts owed by builders to the Noida and Greater Noida authorities. The objective of this proposal is to alleviate the concerns of homebuyers who have endured prolonged delays in registering their flats due to a deadlock between development authorities and builders concerning significant land dues amounting to Rs 39,000 crore.

In a recent report focused on the status of real estate projects and offering potential measures for their revival, UP Rera suggested that the Noida and Greater Noida authorities should possess the power to recover the outstanding dues through alternative means, such as seeking collateral in other projects or personal assets of the developers, or by issuing recovery certificates.

The report, submitted by UP-Rera chairman Rajive Kumar to the state government last week, was prepared by a consultant engaged earlier this year. The reports primary aim was to present a viable roadmap for resolving the deadlock, which has led to a complete halt in flat registrations within residential communities in Noida.

The report categorized more than 200 residential projects based on their physical and financial status. Among these, UP Rera specifically examined eight projects and identified six as financially viable and capable of being revived. Additionally, the report addressed two types of stalled projects those showing no progress over the years and others experiencing delays due to a liquidity crunch yet still deemed feasible. Collectively, these stalled projects have left over 125,000 homebuyers in the two cities in a state of uncertainty.

Presently, the authorities ability to recover dues in NCLT cases is limited to around 30%. UPRera emphasizes the importance of avoiding harsh decisions regarding projects being completed with the assistance of SWAMIH funds, which provide support for affordable and mid income housing.

Kumar believes that the current time presents an ideal opportunity to intervene and implement measures to revive the real estate industry in the region. With positive signs of market improvement, government interventions can have a significant impact, boosting developers confidence and providing relief to numerous homebuyers. At the state level, the government actively seeks solutions to real estate challenges in Noida. At the national level, the Union Ministry of Housing and Urban Affairs has formed a committee led by former NITI Aayog CEO Amitabh Kant to resolve the issues surrounding stalled housing projects across the country.

Realtors have also requested a rebate on the penal interest accumulated over the years due to payment defaults. They have previously met with Kumar and Manoj Kumar Singh, the Infrastructure and Industrial Development Commissioner (IIDC), to discuss their demands.