The Noida, Greater Noida and the Yamuna Expressway authorities, in their board meetings on Friday, approved a ‘project settlement policy’ aimed at addressing realty sector issues, including delayed and sick projects.
Under the policy, a builder will be able to exit from a housing or commercial project if he has not started construction on a plot of land.
The three authorities have come up with this new policy, citing a slowdown in the realty sector, resulting in the builders’ inability to complete their projects, thereby affecting thousands of homebuyers.
Earlier in May 2016, the three authorities had approved an ‘exit policy’ to allow builders to exit from sick projects. But the Uttar Pradesh government rejected it on the grounds that this policy is unable to address multiple issues that the realty sector is facing.
“Following the UP government orders, three authorities formed a 13-member committee that framed ‘project settlement policy’. It covers all issues pertaining to the ongoing crisis in realty sector. Now we will send it to the UP government for final approval so that we can implement it on ground,” said Deepak Aggarwal, chief executive officer of the Greater Noida authority.
There are 95 ongoing realty projects in Greater Noida. Out of these 95 projects, around one lakh buyers who have invested in 80 projects have been affected by the policy.
In Noida too, the investment of around 1 lakh buyers is struck because around 50 projects are delayed. In the Yamuna Expressway authority area, twenty builders have failed to complete their projects due to a dip in the sales of flats. The investments of around 20,000 homebuyers is at stake.
In some cases, builders have completed civil work of a residential building, but are unable to finish it and obtain an occupancy certificate to offer possession. In other cases, buyers have invested in a project but the builder has not started construction on the site. Some of the builders have even stopped construction midway, affecting buyers.
In some cases, buyers are living in a complex, but are unable to execute its registry.
“With the help of escrow account we can help builder raise funds from buyers and finish a project of which civil work is completed. If a builder is yet to begin construction on land then he can exit and we will make sure buyers get refund. In third case, where a builder is halted construction midway, we will involve an interested co-developer to bail out a project thereby benefiting buyers. In fourth case we have decided to execute a registry per flat in proportion to the land cost deposited,” said Aggarwal.