Panel suggests ways for relief to homebuyers in Noida, Gr Noida
A high-level committee, set up by the Ministry of Urban and Housing Affairs to redress the issues of homebuyers and affected parties of Noida, Greater Noida and Yamuna Expressway, has recommended that the development authorities should come up with a policy for taking over the unused land/floor area ratio (FAR) of stuck projects where the builders are not taking enough steps to resolve the issue.
While recommending to bring in other developers as substitutes to complete such unfinished projects, it suggested the Reserve Bank of India (RBI) to relax its February 12 guidelines for the real estate and construction sector and allow banks to consider additional funding to complete the projects.
The committee set up by the Uttar Pradesh Government under Union Housing and Urban Affairs Secretary Durga Shankar Mishra has asked the National Buildings Construction Corporation (NBCC) to conduct more survey of stalled projects of developers other than Amrapali Group and take up a few viable projects to complete them. “The authorities shall provide their full support,” the report said.
It is estimated that 7-8 lakh flats had been planned to be built in Noida and Greater Noida. The construction of these flats started during 2007-15. About three lakh homebuyers are affected due to non-delivery of booked flats in these stalled projects despite making substantial part payment for the same.
“The RBI’s circular of February 12, 2018 restricts additional funding in incomplete stalled housing projects by classifying the loans as NPAs. It is therefore recommended that RBI should review and issue specific guidelines for the real estate and construction sector to enable banks to fund these stalled or incomplete projects,” the committee said.
It is further recommended that there is no common solution to all stalled projects. Authorities may continue to explore project wise mitigation plans and implement the same within their jurisdiction areas. As an incentive to the homebuyers to encourage registration of properties, it is recommended that State of UP may formulate a policy to permit the affected homebuyers to get the title deed registered at the rate prevailing at the time of the committed date of completion of the project by the developer.
Many projects are almost complete but cannot be handed over to the homebuyers because of same minor pending construction works. At this stage the investor or financer do not put in their money as there is no clarity on return of their invested money. Therefore in absence of last mile funding projects get stuck. This adversely affects the home buyers. The committee recommended that the last mile funding of projects may be permitted. For this the concept of “Last-In First-Out (LIFO) model where the investor who puts in his money at the last stage to complete the stalled projects exits, first should be permitted.
There is a need for a proper policy, which may give implementable solution in terms of completion of stalled projects under the jurisdiction of all three authorities i.e. Noida, Greater Noida and Yamuna Expressway Authority. It is recommended that in order to resolve the long-pending issue of stalled projects and to help the homebuyers, the Project Settlement Policy (PSP) may be reintroduced by the UP Government with certain modifications including terms such as: For Zero Period Policy, in case project had been stalled for a stay order from any court/NGT order or Authority had delayed possession/lease deed execution or in case the land had not been acquired/resumed by the Authority at the time of handover or in case actual construction on the site could not be started by the allottee due to the absence of any approach road whatsoever to the plot, the affected period may be declared as a ‘zero period’ by the Authority concerned.
To secure the interest of homebuyers and to avoid multiple sale of any property, the “agreement to sale” deeds may be registered in the office of concerned ‘sub registrar’. The committee recommends that the registration fee of “agreement to sale” may be kept very low or nominal, in order to encourage stakeholders to get registration of “agreement to sale”.