Banks, builders add to buyers’ woes
As if the quashing of land acquisition in village Shahberi was enough, some banks have also stopped fresh lending or installments of the existing loans for projects planned or under-construction in Noida Extension.india Updated: Jul 14, 2011 01:24 IST
As if the quashing of land acquisition in village Shahberi was enough, some banks have also stopped fresh lending or installments of the existing loans for projects planned or under-construction in Noida Extension. Those who had booked flats in Shahberi are naturally a harried lot. Despite a Supreme Court observation that buyers are entitled to refund with interest, buyers have alleged most builders have been delaying exit plans.
Prashant Kumar, who is leading a forum of Noida Extension buyers, said, “Amrapali has refunded most of its buyers’ money with interest. It is giving 12% interest on the buyers’ money, besides giving money to repay the banks with interest. But most other builders are delaying refund or are not clear on the quantum of interest in the name of studying the Supreme Court order and seeking legal opinion.”
Amrapali has the maximum number of affected buyers — 4,000. Its CMD Anil Sharma said, “We have relocated or refunded most of our affected buyers. Only 100 more remain to be taken care of. So far, we have made refunds worth
R10 crore. But only 5% of the total buyers have opted for refund.” The quashing of land acquisition in Shahberi has forced banks to stop disabusing loans. Some banks have held back lending — they are verifying title deeds before they could get back to disabusing loans. “Work is going on at the site of Palm Olympia, in which I have booked a flat. There is no court order regarding land acquisition. Yet banks have stopped financing,” said SK Trivedi, a buyer.
But why banks are sceptical about Noida Extension?
“About 2,000 acres of land has been acquired from farmers and allotted to builders under a staggered payment scheme — repayment could be made in installments in the next 10 years. Builders paid only 10% of the total cost of the land.
Technically, the builder can own the land after full payment he promised delivery of flats in three-four years. This does not allow us to lend money,” said a bank official.