Punjab comes up with policy to revive stalled housing projects
To bail out stalled realty projects, the Punjab government has come up with a policy paving way for addition of promoters in licensed projects that are stuck for want of funds. The policy has come as a major relief to several projects across the state which are stalled due to inability of promoters to maintain required fund inflow from either their own sources or the sale of properties.
The government notified the policy on July 17, allowing addition of a maximum of two promoters to existing projects registered under the Punjab Apartment and Property Regulation Act, albeit with riders. The addition of promoters will be subject to approval from the Real Estate Regulatory Authority, Punjab. The promoter, who was originally granted the license to develop the project, will not be allowed to exit the project.
Promoter interested in bringing others on board will have to make an application along with justification for the need to add promoters in the project along with their consent from joining the ongoing project. The application will be scrutinize by the competent authority which will take a call on whether to allow addition of promoter or not.
According to conditions prescribed in the policy, the promoter to be added will have to prove adequate financial resources to the tune of at least 10% of the project cost. The addition of promoter will attract administrative charges on per acre basis equivalent to license renewal fee per acre per year as notified by the government from time to time.
Once the addition is allowed, the promoters will have to clear the overdue amount within 60 days from grant of approval and the authority at the cost of promoter will invite objections. The new promoters will also have to give an undertaking they will be jointly liable towards fulfillment of all obligations made by the original promoter of the project.