Central committee to UP: Allow flats registry even if dues are not cleared by builders

The Uttar Pradesh government will then give its final approval to the report either in its original form or after changes are made to make it more effective

A central committee, headed by former Niti Aayog chief executive officer Amitabh Kant and mandated to formulate an effective policy that can address the issues being faced by the real estate sector across the country,in its report has recommended to the Uttar Pradesh government that the three authorities -- Noida, Greater Noida and the Yamuna Expressway-- should allow registry of flats without asking the defaulter developers to clear land cost dues against a housing project.

The new report suggests that the authorities must focus on making sure the buyer gets flat possession, and registry is executed and then they can recover their dues later. (HT Photo)

The committee made multiple recommendations to the Uttar Pradesh government that it will look into and take appropriate decisions, which will impact the fortunes of at least 167,000 homebuyers who have been waiting for their homes for almost a decade.

This committee on Monday sent the report to the Uttar Pradesh government that on Thursday sent the same to the three authorities for deliberation and action. The top officials of Noida, Greater Noida and Yeida said the report will be discussed, tweaked and a decision taken on it in the board meetings of the three authorities.

The Uttar Pradesh government will then give its final approval to the report either in its original form or after changes are made to make it more effective.

“We will discuss the report in the upcoming board meeting scheduled on August 13 and take an appropriate decision. We will follow the UP government’s directive on its implementation,” said Lokesh M, chief executive officer, Noida authority.

The new report suggests that the authorities must focus on making sure the buyer gets flat possession, and registry is executed and then they can recover their dues later.

Also, the report said the developer cannot levy any penalty for delay payment penalty on homebuyers who have already been harassed by developers.

The Kant report has suggested that Uttar Pradesh Real Estate Regulatory Authority (UP-Rera) must identify projects that are complete but for which occupancy certificate is not being issued only because the developer has financial dues.

After identification, the UP-Rera must get the occupancy certificate issued and then facilitate the registry of flats in the name of homebuyers in around 300 stalled projects in Noida, Greater Noida and Yamuna Expressway areas.

Another suggestion is that the authorities can recover their dues later by taking over unsold flats or undeveloped land in a realty project.

The report further suggested that a developer be allowed to bring in a new developer to complete a delayed project, beside allowing three years’ additional time to complete a delayed project without any charges.

The report said authorities should not levy any penal interest from developers facing a financial crisis, and authorities must issue mortgage permission without any charges or demand of payment of old dues. It recommended that authorities not cancel the lease-deed of realty projects on the ground of financial default and work under UP-Rera supervision, among others.

While the report is mostly in favour of builders, it is to be noted that the three authorities are struggling to recover around ₹50,000 crore from builders of around 3,000 realty projects, who have delayed project completion, thereby causing sufferings to 167,000 homebuyers, said officials.

The Union housing and urban affairs ministry had in March 2023 formed the committee headed by Kant and comprising officials of expert agencies such as the Real Estate Regulatory Authorities of Haryana, Uttar Pradesh and Maharashtra, among others, to carry out the deliberations and meetings with stakeholders, including realtors, and formulate an effective policy that can address the issues being faced by the real estate sector across the country, including Noida, Greater Noida and the Yamuna Expressway.

Before the Kant report came, the UP-Rera, under then chairman Rajive Kumar had also made similar suggestions that registry of flats should be ‘de-linked’ from financial dues in a stalled realty project.

As per the rules, registration cannot be allowed if a developer fails to clear its dues against a realty project causing distress to homebuyers. The developers, citing fund crisis, refuse to pay the land cost dues thereby causing homebuyers to suffer, who have been waiting for their flats for more than a decade in some cases.

Amit Modi, secretary, Confederation of Real Estate Developers Association of India (CREDAI), a realtors’ lobbying group, said, “The suggestions made in this report are practical and we have requested via a letter that the state government must adopt this and implement it for the revival of the real estate sector. With this report implementation, at least 60-70% of issues will be resolved in Noida and Greater Noida.”

Former national president of CREDAI and chairman of ATS Group Getambar Anand said, “This report has come as a much-needed relief for the real estate sector and we hope that the state cabinet approves it and implements it as this has already been approved by the Centre in the interests of thousands of homebuyers.”

Homebuyers are also hopeful of a positive outcome.

“We cannot believe such reports until it is implemented and its results are visible on the ground in addressing our long standing grievances. In the past, too, we have seen many such reports but nothing happened. We believe serious effort is needed to address the ongoing crisis in the realty sector in Noida and Greater Noida, and not just to create a positive sentiment before the General Elections in 2024,” said Bharat Arora, a homebuyer.