RERA Talking Over Distressed Projects
Coming to the rescue of homebuyers, many state RERA authorities are deciding to take charge of the unfinished projects and completing them.
On March 08, the Uttar Pradesh Real Estate Regulatory Authority (UP-Rera) decided to take over and finish construction of seven realty projects, which are stuck for a long time. Three out of seven are commercial projects in which around 4,000 investors have bought retail space and some residential units. While in remaining four realty projects there are 4,710 flats yet to be delivered. Last year, Madhya Pradesh Real Estate Regulatory Authority (RERA) salvaged the situation for as many as 800 homebuyers of a project located in Indore. RERA plans to complete the project by constituting a committee of buyers who will get the “finishing work” done by pooling in the amount due from them.
Last year, Madhya Pradesh Real Estate Regulatory Authority (RERA) salvaged the situation for as many as 800 homebuyers of a project located in Indore. RERA plans to complete the project by constituting a committee of buyers who will get the “finishing work” done by pooling in the amount due from them.
Similarly, State-run National Building Construction Company (NBCC) has already got an approval from the Supreme Court to take over stuck projects of distressed Amrapali Group. Going forward, NBCC could take over projects of other Insolvency-hit developers such as Jaypee, Unitech and 3C Company. The Section 8 of the Real Estate (Regulation and Development Act) act not only empowers and authorizes the RERA Authority to take charge of such construction but also empowers RERA to take away projects from a particular developer/promoter and to assign it to another agency. Also read http://realtyplusmag.com/the-steel-city-of-india-hits-a-century/
As of now, RERA authorities are using these powers sparsely and mostly in cases where 80% of the construction work has already completed. This unparalleled initiative by RERA authorities will further ensure safeguarding the interests of home buyer’s. In a sympathetic move, the housing ministry has also directed the finance ministry to speed up the process of setting up a stress fund to complete stuck projects in Noida and Greater Noida. A high-powered committee has suggested developers be given relaxations under a Project Settlement Policy (PSP) to ensure quicker delivery of homes to buyers. Under the policy, developers are offered waiver in penal charges and reduction in interest rates, too. They must, however, give a written undertaking to complete projects in a time-bound manner to avail of the incentives offered under the scheme, failing which the incentive offered could be retracted.