The Greater Noida authority will display financial details of builders and their projects on boards at the construction site of each project. The move was decided upon as officials have discontinued uploading details of defaulting builders on the authority’s website.
“Uploading defaulters’ names on the website creates a negative sentiment in the realty market. As a result, financial institutions, including banks, stop payments to the builders. Also, buyers do not want to pay due to a fear of losing their investment. It affects a project and also the buyers because the project gets stuck. We want to help realtors deliver homes to buyers. We are also looking for new initiatives to revive the projects,” said Deepak Agarwal chief executive officer of the Greater Noida authority.
Homebuyers have been asking the authority to post details of realtors in a public domain to ensure transparency in their dealings. On September 6, 2016, the authority had listed defaulters’ names on its website. But under pressure from the builders, the Greater Noida authority removed the list after a week.
“Earlier we had uploaded builders’ financial defaults on our website. That had a negative impact on the realty sector as homebuyers had stopped paying remaining instalments for their flats. Therefore, we have now decided to put all project related details, including financial defaults, on a board at each construction site. Buyers can visit the site to know about a project or a realtor,” Arvind Mohan Singh, the financial controller of the Greater Noida authority, said.
Officials said that the display board on-site will provide information about the project size, total units, completion time, map approval details, financial details and the background of a builder.
Thousands of homebuyers in Greater Noida have been affected as several realtors have delayed projects by around eight years.
At present, there are 46 defaulting builders who are yet to clear land due of Rs2,200 crore owed to the Greater Noida authority. The authority had allotted the land in 2006-2010 period on an instalment basis. Realtors were allotted the land on payment of 10% of the total cost. However, many realtors had stopped payment of installations citing a dip in sale of flats.
The authority had stated in September 2016 that 95 developers, including defaulters, had to pay Rs4,500 crore to the authority for instalments, realty charges and land cost dues.
“To restore the buyers’ faith in realtors, we have asked realtors to open escrow accounts. In escrow account, a realtor cannot divert funds to any other purpose and has to spend the money for the specific project. The realtor, bank and the authority will have the mandate to operate an escrow account,” Singh said.
Till now, only two realtors in Greater Noida have opened escrow accounts. “We hope the authority will not waste time in installing the display boards at construction sites. This should have been done much before thousands of homebuyers were cheated,” Abhishek Kumar, the president of Noida extension flat owners’ welfare association (NEFOWA), said.