Homebuyers in Unitech Vistas demand escrow account

Homebuyers in Unitech Vistas have demanded that the developer set up a joint escrow account and take this project out of the purview of the scheme of compromise under Section 391 of the Companies Act.

Homebuyers in Unitech Vistas have demanded that the developer set up a joint escrow account and take this project out of the purview of the scheme of compromise under Section 391 of the Companies Act.

The realtor failed to obtain approvals for the revised plan.

The scheme of compromise and arrangement provides for penalties, in the case of a delay, up to two times the contractual penalties in the agreement as well as phased exit for homebuyers. This scheme was, however, challenged in the apex court, which has stayed it.

The buyers made their demand at a meeting with Unitech representatives at the project site in Sector 70 near the Southern Peripheral Road.

Unitech Vistas project initially comprised of 1,252 units in Phase-1 but the developer increased the number to 1,516 units, on the launch of Phase-2. However, the realtor could not get the necessary approvals for the revised plans.

“The company has set up a collection and development account to collect money from buyers but this is not acceptable. An escrow account should be set up for the project, in which at least two buyers should be made signatories,” Sunil Bhardwaj, executive member of Vistas residents’ association (VRA), said.

The association members also alleged that the licence for the Vistas project has not been renewed by the developer, since its expiry in 2010. “While the flats have been sold, the revised development plan has not been approved by the government. Buyers are ready to pay money but the developer must fulfil the project and adhere to norms,” Piyush Gupta, a buyer in the project, said.

Despite instructions from the district administration to set up an escrow account, there is no action in this regard. However, the buyers said that after an intervention from the state government, the developer agreed to meet them and look for solutions.

“There is also a discussion about signing a new memorandum of understanding with the VRA, which is a step in the right direction,” a buyer said.

“The VRA has also asked Unitech to remove the project from the purview of the scheme of compromise under Companies Act so that legal rights are not compromised,” Bhardwaj said.

Also, another issue is that a large chunk of land, located at the entrance and advertised as part of the project, is yet to be acquired by the builder.

DTCP officials, meanwhile, said that they have asked the developer to send specific timeline of various projects, including the Vistas. “The developer has been asked to send timeline for specific projects, and to also state clearly the source of funds to complete the construction,” RS Bhath, assistant town planner, said.

A spokesperson for the realty group, Unitech, said, “We are working with the buyers to ensure that the Vistas project is completed. More funds have been arranged from different sources and construction work has resumed. We will deliver on our promises.”