E-Paper
Punjab RERA tells GMADA to protect real estate investors
Punjab RERA writes to the development authority to take prompt measures to prevent a repeat of GBP Group-like situation
The Real Estate Regulatory Authority (RERA), Punjab, has written to the Greater Mohali Area Development Authority (GMADA) to take corrective measures for protecting the rights of people who have invested into properties auctioned by it for setting up group housing societies and other commercial projects.
The letter comes two months after the management of GBP Group fled the country, leaving in the lurch about 2,500 people who had invested nearly ₹1,500 crore in their various real estate projects in Mohali.
In the past decade, Mohali, particularly its peripheral areas of Zirakpur, Kharar, and New Chandigarh (Mullanpur), has emerged as a real estate hub and accounts for around 60% projects across Punjab. Besides private builders, even GMADA is developing townships such as IT City and Aero City.
According to figures available with RERA, it has received 1,572 complaints against builders from across the state since September 2017. Of these, around 1,000 came from just Mohali.
Key concern
RERA in its letter has mentioned that, at present, when GMADA auctions land for a group housing project, it takes only 25% advance and hands over the possession to builders, who can pay the remaining amount in instalments over eight years. Also, builders are getting their projects approved without any sale deed. The regulatory authority has asked GMADA to look into the matter to prevent a repeat of an episode such as that relating to GBP Group.
Notably, RERA is giving a five-year registration period to builders, while GMADA is giving them eight years to pay for the land. In such a situation, it is not possible for the builder to give possession in five years, as neither the land title is in their name nor they can get a a completion certificate till they have cleared all the dues.
Even the RERA number is being issued without land title, even as every builder is required to upload a copy of the sale deed on its website. In the case of Mohali, most builders are leaving this column blank.
Stakeholders say
Pawan Kumar, an allottee at Aerocity, said builders collect 90% of the sale value of a flat from buyers, and spend just 25% because they have not paid for the land and even the finishing work is pending. “These funds are usually diverted by builders to new projects and the present projects get stuck, as was the case in Noida,” he said.
Harish Gupta, president of the Zirakpur Builders Associations, said: “When GMADA is approving the project without a sale deed, the rule should also apply on a project developed by builders on private land.”
Sarvjeet Singh, principal secretary, housing and urban development, Punjab, said: “We will soon hold a meeting to discuss ways to streamline the process.”
Recently, the Supreme Court had to intervene in Noida and ask various builders to clear their dues after many of them turned defaulters and left the investors in the lurch. In fact, the Noida authorities have now changed the rules and are taking 50% money upfront and the remaining 50% within four years from the builders.
