The Noida authority said on Tuesday that it has asked builders with pending land dues to pay 10-15% of the amount due till April 30 and pay the remaining sum in small instalments.
The authority took the step after business consulting firm Ernst and Young India conducted a survey and suggested that builders are facing a financial crisis due to global economic slowdown, environmental hurdles and dip in sales in the real estate market.
Homebuyers too are affected since builders facing financial crisis are unable to complete group housing projects.
“If they pay a part of the dues till April 30 and get the remainder rescheduled it can save them from becoming a defaulter. We will not cancel their land allotments and they can deliver houses to buyers,” said Manmohan Mishra, financial controller, Noida authority.
According to officials, builders of 127 residential projects in Noida together need to pay Rs 7,200 crore in land dues, without calculating the interest.
As per the policy, builders who owe Rs 500 crore or less in land dues need to pay 15% of the total amount and can pay the remainder in instalments. Builders who owe over Rs 500 crore in land dues will have to deposit 10% of the amount to become eligible for rescheduling of payment, according to officials.
The authority had approved the proposal for this reschedule plan in its board meeting on March 14, 2016. Builders were supposed to avail the benefit by March 31. However, not many have come forward.
“Only six realtors have availed this scheme till date. So we extended it to April 30,” said Mishra.
Very few builders are applying for this scheme, probably because they are unable to pay even 10-15% of the amount due,” said Vipin Gaur, general manager, Noida authority.
However, realtors suggest that other steps are needed for the sector.
“Buyers can only benefit when the Noida authority gives a flat-wise no objection certificate (NOC) for registry. Builders will be able to pay the dues in respect of only those flats that are ready and need occupation certificate and not for the entire project at this stage,” said Anil Kumar Sharma, CMD, Amrapali Group.
However, Gaur said, “Registry can only take place when a builder pays the entire land dues. There is no mechanism in place under which the Noida authority can allow flat-wise registry.”