Homebuyers Appoint Original Promoter JAL as Contractor
The Uttar Pradesh RERA (UP RERA) this week approved an order allowing the homebuyers’ association of a project in Noida to take charge of the completion of four stuck towers and the remaining 300-odd units.
Interestingly, the association has decided to hire Jaypee Associates Limited (JAL), the original promoter, as the contractor for the work. Balvinder Kumar, member, UP-Rera said that JAL gave its consent and “we permitted the homebuyers’ association to take control of the project that we had deregistered earlier.”
The homebuyers have decided that the project should be completed by the original promoter which is JAL. The estimated fund requirement for completion of the four towers is Rs 104 crore of which 40 percent would be contributed by Jaypee and the remaining would be in the form of receivables from homebuyers.
“This is a unique case because the original promoter is being brought on board. Had a new promoter come in, he would have had to re-evaluate the entire project and that could have become both time consuming and an expensive exercise,” said Kumar.
As per RERA authorities this could become a successful model to complete stuck projects going forward, especially after COVID-19, when more such cases are bound to happen wherein developers may not be in a position to complete projects in the wake of liquidity issues.
Under Section 8 of RERA, it can take over an unfinished realty project if it is 80 percent complete. It can act as a facilitator and work with the committee of homebuyers to complete the project.