Make defaulting realtors pay a part of dues in 60 days, UP govt to authorities

The order said that an independent agency or chartered accountant must be engaged in carrying out an audit and calculating the financial dues against a housing project

Two days after the Uttar Pradesh government announced a scheme to address challenges facing the real estate sector, it directed the Noida, Greater Noida, and Yeida on Thursday to take up the policy in its respective boards and make the defaulter realtors pay up a part of dues in 60 days.

The UP government believes that the success of the new scheme, aiming to address the woes of the real estate sector, lies with the efficient execution. (File Photo)

It also directed them to ensure that the flats’ registry is executed in three months.

The government order (GO) states that an independent agency or chartered accountant must be engaged in carrying out an audit and calculating the financial dues against a housing project as per the new scheme, and help in its execution to protect the interest of homebuyers.

The state government believes that the success of the new scheme, aiming to address the woes of the real estate sector, lies with the efficient execution.

“The role of decision in success is only 5 percent and the role of execution is 95 percent,” said the GO addressed to the CEOs of the three industrial bodies -- Noida, Greater Noida and the Yamuna Expressway Industrial Development Authority (Yeida).

As per the order, the independent agency or CA will calculate the financial dues of a housing project after deducting the penal and simple interest imposed during two years of Covid 19, when the government decided to give a waiver.

The agency will also deduct the penal interest or any other penalties imposed during the period when the construction was disrupted due to the national green tribunal (NGT) order in 2013, along with other court disputes between farmers and the authorities affecting the housing project.

The GO has directed the three bodies to chalk out a detailed road map to execute this scheme so that the realty sector is benefited and the homebuyers get justice.

The board, comprising authority and the state government level senior officials, will have to implement the scheme with regular monitoring at the ground and taking all stakeholders including banks, realtors, housing financing agencies and homebuyers into confidence.

The GO also mandates to give buyers regular updates about the latest developments regarding the scheme and its implementation.

According to Ravikumar NG, chief executive officer, Greater Noida authority, since the GO was received on Thursday evening, it would be put forward in the next board meeting for discussion and a successful implementation of the scheme.

“The board meeting scheduled on December 22 has been postponed to the future. Once the next date for the board meeting will be finalised, we will draw a plan to enforce this scheme as per the rules,” said the official.

The new scheme allows the co-developers to take over the stalled project and share the onus of delivering it as per the scheme.

In case, the developers do not opt for the scheme (of payment of the 25 percent out of total dues and then pay remaining amount maximum in 3 years), the authority either will cancel the allotment and takeover the project, or it will seize the project’s commercial part and recover the dues so that flats’ registration can be executed since homebuyers are suffering for so long, states the GO.

If any developer does not use this scheme, the authority will impose 20 percent of the project’s cost as a penalty and ban the defaulter realtor for next five years from working in the state. According to a UP government official, the authority will process the realtors’ applications and they will pay the dues in 60 days.

The board meeting for the Noida, Greater Noida and the YEIDA was scheduled on December 22 but due to the UP Chief Minister Yogi Adityanath visit on December 24, the board meeting is hoped to take place after CM’s visit.

“We will organize the board meeting and then implement this GO to give relief to the homebuyers,” said Arun Vir Singh, chief executive officer of the Yeida.

As per the UP government there are around 2.5-3.5 lakh homebuyers, who are suffering in Noida, Greater Noida and the Yamuna E-way wait for justice for last eight to nine years.

Uttar Pradesh Finance and Parliamentary Affairs Minister Suresh Kumar Khanna said, the state cabinet in a meeting held on Tuesday okayed implementation of the recommendations of the committee constituted under the chairmanship of Amitabh Kant, ex- CEO Niti Ayog on Legacy Stalled Real Estate Projects.

“After the cabinet approval, we were waiting for the GO on it for exact details. After going through the GO, we now feel that the Noida region market will witness a positive impact once this policy is implemented,” said Getambar Anand, ATS Infrastructure Ltd. chairman and ex-national president of confederation of real estate developers association of India.

“The market will witness a revival with this scheme,” he added.

According to a report of the Indian Bank association, there are 4.12 lakh houses in the country that have not been completed due to the poor financial condition of the developers.

While 2.4 lakh houses are in NCR region, with the implementation of the recommendation of the Kant committee, the interest of the homebuyers will be protected. The builders will be able to complete the housing projects on schedule, said UP government in a press note.