The Uttar Pradesh government has offered to waive six months’ penal interest on pending dues of people who have bought property from their respective area development authorities, provided they pay the pending amount by September 30, 2020.
Ghaziabad development authority (GDA) officials said that the order will help the cash-strapped body generate revenue. Since the Covid-19 hit, the authority has been losing cash as the state leveraged its resources to fight the pandemic.
The order defines six months as from March 1, 2020 to August 31.
“At present we have provision of 12% of simple interest and 3% additional penal interest in case of pending payments. According to the government order, if the pending payments are cleared by September 30, there will be no levy of penal interest on pending amount for the six months,” said Asheesh Shivpuri, authority’s chief architect and town planner.
According to officials, the new provision under the government order is likely to benefit about 7000 property owners who have pending payments to be made to the authority.
“In case there is any other waiver applicable on residential/commercial properties, such as if one-time payments are made within 45-60 days, then the computation of the waiver will not take into account the period of March 1 to August 31. The provisions of the government order will not amount to any concession or change in terms and conditions of the agreement,” the government order said.
{{/usCountry}}“In case there is any other waiver applicable on residential/commercial properties, such as if one-time payments are made within 45-60 days, then the computation of the waiver will not take into account the period of March 1 to August 31. The provisions of the government order will not amount to any concession or change in terms and conditions of the agreement,” the government order said.
{{/usCountry}}According to officials, the repayment period in case of economically weaker sections is 10 years, three years in case of middle income group flats and two years in case of higher income group flats. It is five years in case of commercial properties.
“The allottee has to repay within the time frame specified for each type of property and has to repay in monthly instalments. In normal course 12% simple interest is charged on monthly instalments. In case of default of single instalment, the component of penal interest, which is 3% above the simple interest, is charged accordingly,” Shivpuri added.
Developers feel that the order should be more relaxed.
“We feel the present order should be more accommodative in terms that it should be rolled out for a period of at least one year in wake of the pandemic. Since many states are enforcing lockdown again and eight days in a week (two days of Saturday and Sunday) are also under weekend restrictions in UP, the real estate will hardly see people coming in to look for property which they usually arrive during the weekends,” said Gaurav Gupta, president – Confederation of Real Estate Developers Association of India (CREDAI - Ghaziabad). “Further, the construction works have also suffered during the lockdown and full workforce is still not available. So, people will have no big liquidity available with them in present times to pay up entire pending amount by September 30.”