G Noida tightens policy for land allotment to builders
Instead of 10% of the total land cost, a builder will now have to deposit 30% of the total land cost at the time of allotment of a group housing plot. As per the old policy, builders were to pay 90% of the plot cost in eight years.noida Updated: Sep 22, 2017 21:30 IST
The Greater Noida authority changed its 10-year-old group housing land allotment policy for builders in its board meeting held on Friday. Instead of 10% of the total land cost, a builder will now have to deposit 30% of the total land cost at the time of allotment of a group housing plot. The builder can pay the remaining 70% of the cost in instalments over seven years.
As per the old policy, builders were to pay 90% of the plot cost in eight years. The authority also used to give a two-year extension for builders to clear land dues.
The move comes to ensure that builders are serious about completing projects and deliver it to buyers on time.
“Now, a builder will have to pay 10% as a reservation fee and 20% as allotment fee. The builder will have to pay remaining 70% in instalments in seven years of time. We have also done away with the two-year extension,” said Debasish Panda, chief executive officer of the Greater Noida authority.
Officials said that the change was necessary because the faulty policy has led to the ongoing realty crisis, which has left thousands of homebuyers in the lurch, with no certainty over their stuck investments. As per the Greater Noida authority’s estimate, around one lakh homebuyers are awaiting delivery of flats even after the deadline because builders are unable to finish projects, citing a funds crunch.
“Had this 1:9 policy not been in place, unserious builders, who do not have adequate funds and expertise, would not have come into the realty business. Now, it is too late to start this policy, when the authority has already allotted most of its group housing land. The damage to homebuyers has already been done,” said Indrish Gupta, a buyer.
In 2006, the Noida and Greater Noida authorities had a policy under which builders had to pay 40% of the plot cost at the time of allotment and the remaining land cost was to be paid in four years.
However, the policy was changed after the Bahujan Samaj Party came to power in 2007. On June 3, the Noida authority also changed its policy on the land allotment.
At present, builders acquiring land in Noida must pay 40% of the total cost at the time of allotment and the remaining 60% in four years.
“Both Noida and Greater Noida authorities are hardly left with group housing land to allot to farmers. This faulty policy is troubling buyers because many small-time property dealers became builders and are now failing to finish the projects and deliver flats to buyers,” said Abhishek Kumar, president of Noida flat owners’ welfare association.