Registration of flats should be de-linked from financial dues, Rera tells govt

The UP-Rera has suggested that if the present deadlock continues, then neither will the authority be able to recover the dues nor the homebuyers able to get flats registered in their names

The registry of flats should be de-linked from the financial dues owed by a developer so as to find a solution to the woes of over 200,000 homebuyers in Noida and Greater Noida who are unable to get registries done, the Uttar Pradesh Real Estate Regulatory Authority (UP-Rera) has recommended to the Uttar Pradesh government, among other measures, after a survey of stuck and incomplete realty projects.

The UP-Rera surveyed over 200 projects in Gautam Budh Nagar district and then sent its recommendation to the state government, suggesting the formulation of a ”practical policy” that can address issues on a ”case to case” basis. (HT Photo)

The Uttar Pradesh government and the Centre had asked expert agency UP-Rera to carry out a survey after the authority refused to issue occupancy certificates for complete projects unless the realtor clears all financial dues. Since most realtors have some amount of dues, the situation is that thousands of homebuyers are unable to execute registries despite waiting for \over a decade, thereby slowing down the growth in the real estate sector.

According to the Noida and the Greater Noida authorities, they are struggling to collect around ₹50,000 crore dues from around 200 realtors.

The UP-Rera has suggested that if the present deadlock continues, then neither will the authority be able to recover the dues nor the homebuyers able to get flats registered in their names.

The UP-Rera surveyed over 200 projects in Gautam Budh Nagar district and then sent its recommendation to the state government, suggesting the formulation of a ”practical policy” that can address issues on a ”case to case” basis.

According to rules, the authorities issue occupancy certificate to a ready realty project only if the project owner has cleared all financial dues and obtained a no objection certificate from the finance department of the authority concerned.

Amid a slump in the realty sector, most realtors failed to pay dues and obtain occupancy certificate thereby delaying the registry of flats in the name of homebuyers.

The UP-Rera survey of 200 projects established that there are 44,000 units in which buyers have possession without registry and 125,000 units where no possession nor registry has happened. These units are in the advanced stages of completion, said officials.

“We have made recommendations under Section 32 of the Rera Act to the state government and suggested the de-linking of registry from the no dues certificate because realtors are seemingly not in a condition to pay the dues. If that is done, it can resolve the issues for 165,000 homebuyers who have been waiting for so long. We have also suggested that the authorities can mortgage the personnel assets and properties of realtors, other than the project, as a guarantee so that the deadlock can be resolved and homebuyers get the justice,” said Rajive Kumar, chairman of UP-Rera.

The UP-Rera has suggested that a ”uniform policy for all” cannot address the issue at hand, and there should be a policy that can address the issues on a “case to case” basis because the crisis is different in every project.

“There are some projects, which are economically viable and any new developer can step in to complete and deliver the homes. But some projects are not in that condition and, therefore, we have also suggested that authorities should take over these projects and deliver. The ultimate goal is that \homebuyers must get justice,” said Kumar.

The other suggestions made by UP-Rera include waivers on interest for the period when construction was disrupted due to land disputes or other legal issues; cancellation of land in projects where there is no third party interest; economically viable projects must be taken over by authorities and re-auctioned to invite the new developers to complete and deliver the project.

The central government has also constituted a committee to explore other options.

“We attended meetings with UP-Rera, the central government committee and also with the Uttar Pradesh government and discussed our issues. We hope that the realty sector issues will be resolved soon once the financial dues are de-linked and the interest waivers demanded by realtors are granted,” said Nikhil Hawelia, joint secretary, Confederation of Real Estate Developers Association of India (CREDAI), a realtors’ lobbying group.

The Noida and the Greater Noida authority chief executive officer Ritu Maheshwari said, “We discussed the realty issues with UP-Rera and the central government. We have shared the Noida and the Greater Noida authorities concerns with regard to these issues.”

The homebuyers hope that the state government and the other agencies will come up with a solution that is practical enough to address their issues.

“We have been hearing for a long time that a solution will come soon but nothing has happened. We hope that this time the state government will approve and implement a policy that can truly address the plight of each homebuyer,” said SK Srivastav, a homebuyer.