To protect the interest of homebuyers as well as the real estate sector, the Ministry of Housing and Urban Affairs (MoHUA) on Wednesday issued an advisory to all States and Union Territories and their respective Real Estate Regulatory Authorities (RERA) to automatically extend registration of all projects registered under RERA which were due on or after March 25 by six months and further upto three months if the situation in a particular state or any part thereof needs consideration in view of the Covid-19 pandemic.
The regulatory authorities now cannot take action against the developers until the revised timelines get over.
In a statement, the ministry said it has issued an advisory to all States / UTs and their respective Real Estate Regulatory Authorities to consider the current pandemic of COVID-19 as “force majeure” being a natural calamity, which is adversely affecting the regular development of the real estate projects and extend registration of all real estate projects registered under RERA by 6 months and further upto 3 months, as per situation evolving in view of the COVID-19 pandemic.
According to the ministry, this measure will safeguard the interest of homebuyers to get them the delivery of their flats/homes although with the delay of few months but it will definitely ensure the completion of the projects.
To avoid unnecessary litigation against real estate developers Finance Minister Nirmala Sitharaman on May 13 announced an extension in registration and completion date of real estate projects under RERA.
“The nationwide lockdown forced the labours to return to their home and in such circumstances, work on the real estate projects will take quite some time to restart in full gear. In the absence of urgent remedial regulatory measures under RERA, there is also a possibility of many real estate projects getting stalled leading to litigation etc. This will ultimately result in non-delivery of flats to the homebuyers, who have invested their lifetime savings for their dream homes,” the ministry said.
A lot of projects got stalled due to various reasons leaving lakhs of homebuyers in a very difficult situation, where they were running from pillar to post for their booked homes. “It is clear that in such circumstances, work on the real estate projects will take quite some time to restart in full gear. In the absence of urgent remedial regulatory measures under RERA Act, 2016, there is also a possibility of many real estate projects getting stalled leading to litigation etc. This will ultimately result in non-delivery of flats to the homebuyers, who have invested their lifetime savings for their dream homes,” officials said.
The construction work of ongoing real estate projects was halted leading to reverse migration of labourers to their native places. Further, there was large scale disruption in the supply chain of construction materials which adversely impacted the construction activities across the country. The officials further added that it is also anticipated that construction activities in pre-monsoon could not be undertaken, which will further delay the construction cycle. Moreover, due to the impending monsoon season followed by festivals like Dussehra, Diwali and Chhath, the labourers are not expected to come back soon.
Project registration certificates will also be issued automatically with revised timelines and all timelines for various statutory compliance under RERA are extended concurrently. These measures will destress the developers of the compliance burden and will ensure that they focus on the completion of the project as per revised timelines.
There was a demand for providing special relief for the sector so that it is able to cope up with adverse impact of the crisis. Covid-19 has already disrupted construction activities due to reverse migration.