Real estate body may not help buyers in Noida’s stuck realty projects
Officials said that RERA will not be able to resolve complicated cases, wherein buyers have paid the total flat cost but the realtor is unable to execute delivery due to a fund crunch.noida Updated: Apr 17, 2017 10:25 IST
The real estate regulatory authority (RERA) that is likely to be formed in Uttar Pradesh soon will not benefit homebuyers who have invested in realty projects that are currently stuck, according to officials of the Noida authority.
Officials said that RERA will not be able to resolve complicated cases, wherein buyers have paid the total flat cost but the realtor is unable to execute delivery due to a fund crunch.
“There are many builders who claim they have no funds to revive a stuck housing project. Homebuyers refuse to pay the remaining 4-5% of flat cost because they do not trust the builder, who has allegedly diverted buyers’ money to other businesses illegally, thereby delaying a group housing project. RERA has no provision to rejuvenate a stuck project if the builder has no funds,” a Noida authority official said.
The Noida, Greater Noida and Yamuna Expressway authorities are to recover around Rs25,000 crore from builders in land dues. Many realtors have turned defaulters, citing a dip in the sale of flats.
In Noida, 86 group housing projects have been delayed by three to four years due to a dip in the realty sector, affecting around one lakh buyers who had invested in projects that were to be delivered in 2012. In Greater Noida, around 3.5 lakh homebuyers are still yet to get possession of flats that were to be delivered from 2012.
“As per RERA rules, ‘ongoing’ projects for which occupancy certificates are to be issued by the respective authorities, will be governed by RERA. As per the act, officials can either ask the builder to refund money with interest, levy a penalty for delay or put the builder behind bars, but if the builder does not fund the project, how can RERA ensure justice to a buyer? RERA may be of help in new housing projects where buyers have not paid the flat cost to the builder,” SK Nagrath, the president of Jaypee Aman homebuyers association, said.
The Real Estate (Regulation and Development) Act, 2016, came into effect on May 1, 2016, and the process of forming operational rules and putting in place the institutional infrastructure, to protect consumer interests and promoting the growth of the realty sector in India, was initiated.
As per the notification, the rules under the act were to be formulated by the Central and state governments within six months from the date of enactment. In addition, states are bound to form real estate regulatory authorities within a year.
In November 2016, the Uttar Pradesh Real Estate (Regulation and Development) Rules-2016, were notified. The regulatory authority will consist a chairperson and three full-time members appointed by the state government. The staff required for the purpose is yet to be recruited and a website enabling homebuyers to file a complaint of their grievances is also to be set up.
“Let the government recruit the staff. Only then will RERA be able to address issues faced by homebuyers,” said Amit Mohan Prasad, the chief executive officer of the Noida and Greater Noida authorities.
As per the Centre’s deadline, RERA should start functioning from May 1, 2017.
Homebuyers in Noida are planning to meet chief minister Yogi Adityanath and demand that new realty projects come under the ambit of RERA to ensure that buyers are not cheated or harassed.
“I have written to the chief minister and the CEO of Noida authority, seeking that the government issues an ordinance to take over the property of errant builders, to ensure that incomplete housing projects are finished,” Nagrath said.