Relief for 50,000 homebuyers in Noida as sub-leasing gets administrative nod

According to officials, there are over 50,000 buyers who have taken the possession of flats in various projects, without executing the respective registration deeds, because of which the Gautam Budh Nagar administration is facing a loss of around ₹1,300 crore.

In a major relief for homebuyers, the Gautam Budh Nagar administration has come up with a new plan to address the issue of non-registration of flats by builders who are either unable to clear their dues to authorities, or have given possession of flats without getting occupation certificates (OC).

According to officials, the agreement of sub-lease with the builders will help buyers, as they won’t need to pay extra if the circle rates increase at the time of registry. (HT File)

According to officials, there are over 50,000 buyers who have taken the possession of flats in various projects, without executing the respective registration deeds, because of which the Gautam Budh Nagar administration is facing a loss of around ₹1,300 crore.

A registration agreement is signed only when the builder clears all its dues with the Noida authority and secures an OC.

The administration has now asked builders and buyers to sign an agreement of sub-lease, under which buyers will have to pay the full stamp duty as per the existing circle rates.

Under this arrangement, buyers will be exempt from paying the stamp duty again when the registration is completed. At that time, the buyer will have to pay only ₹50 as stamp duty.

According to officials, this arrangement will help buyers, as they won’t need to pay extra if the circle rates increase at the time of registry. “This initiative will be beneficial for everybody as buyers will secure their investment, the builder will get the money to pay the authority, and we will get our revenue,” Keshav Kumar, additional district magistrate, finance, said.

“We want to ensure that both buyers and builders find a middle path , while we also recover our revenue,” Kumar said.

Giving possession of flats without registry is a violation of Section 17 of the Registration Act, and an FIR for this offence may be registered under Section 64G of the India Stamp Act.

The stamp and registration department has already filed FIRS against 30 builders for giving out flats without registrations. “We will also get to know about the people who don’t intend to pay stamp duty,” Kumar said.

The Confederation of Real Estate Developers Association of India (Credai) said the move will benefit homebuyers living in complexes where the builder is yet to finish the project and were yet to get OCS.

“Home-buyers have been worried about their flats and registries because builders are unable to obtain OCS for a housing complex. Under the new agreement, buyers will be relieved, having at least paid the stamp duty to the government, knowing they will not be termed as illegal possession holders later on. The move is expected to benefit around 30,000 flat buyers living in housing complexes without OCS,” Prashant Tiwari, president of UP Credai, said.

PP Nagar, president of the Bar Association of Noida, said the move will empower homebuyers on a legal front.

“The buyer will have a stronger right over the flat, and builders will not be able to bully buyers, as it happens in the absence of a registered agreement. Usually, builders often threaten to cancel the flat booking on several grounds, as the buyer is only armed with a builder-buyer agreement or agreement to allotment before the registration of flats. However, after a two-party agreement to sublease, the builder cannot cancel the booking of a flat at will,” Nagar said.