The Uttar Pradesh Real Estate Regulation Authority (UP-RERA) has summoned promoters of 22 projects in Ghaziabad, Noida and Greater Noida, on October 23, 2019, over delay in handing over possession of properties to buyers. The authority has altogether identified 397 such projects in the national capital region and called 22 of them for a meeting at its Greater Noida office.

Promoters of these projects include the Ghaziabad Development Authority, the Greater Noida Industrial Development Authority, Ajnara Realtech, Newtech Promoters and Developers, Logix City Developers, Assotech, Solitaire Infrahome, Newtech La Palacia, Bulland Builtech, Himalaya Real Estate, Opulent Infra Developers, Earthcon Universal Infratech, Patel Advance JV, Uppal Chadha Hi-tech Developers, Aims Promoters, GS Promoters and Harsha Associates.  

"The UP-RERA has identified several promoters that have missed the deadlines to give possession," the regulator said in a statement. Under Section 63 of the real estate law, builders will have to pay a penalty of five per cent of the total project cost if they fail to give satisfactory replies.

Notices would be sent to more such builders shortly.

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UP-RERA To Auction Defaulting Developers' Unsold Stock, To Refund Investors

Aggrieved homebuyers who have invested in stuck projects in Noida, may be in for some relief. The Uttar Pradesh Real Estate Regulatory Authority (UP-RERA) has said that it is planning to auction the properties of defaulting builders and use the money accrued, to refund such buyers. The administration has already sent out 660 recovery notices to errant developers but haven't heard from them, the reason being, most of these builders are staring at bankruptcy.

At a crucial stage like this, UP-RERA has been planning to work out a solution for consumers for whom a lot is at stake. The authorities are also planning to launch a portal for global e-auction of unsold properties of bankrupt builders who have already been sent recovery notices. With this, developers will be under tremendous pressure to complete their projects or have their unsold inventory auctioned at a reserve price.

“None of the 660 recovery notes sent to the builders through the district administration in Gautam Budh Nagar has been honoured by the defaulters. So, we have now decided to auction unsold inventories of such builders to return the money to aggrieved buyers in delayed projects, should they want it back,” Balwinder Kumar, member, UP-RERA said.

Buyers’ gain

Whether a builder has not been able to deliver and where the buyer wants to exit OR when developer has been unable to pay a delay penalty despite promising to do so- in both cases, the money received from auction will be used to refund the homebuyer. Buyers have welcomed the move although experts say that this will also be challenging for authorities given that there is a risk of market dynamics becoming imbalanced as also other requirements, for example, the need for valuers who could set a reserve price.

Unified RERA platform

Efforts are also being made to make the RERA more efficient. The Union government on June 25, 2019, said a common online platform that joins all state and union territory real estate regulatory authorities (RERA) must be set up to provide homebuyers a more effective channel to voice their concerns. This platform would also be instrumental in promoting better interaction among homebuyers, developers and authorities, according to the government. 

Better co-ordination would prevail as state authorities would have access to the orders made by their peers which could act as a guiding principle for all of this. This would also help state authorities passing contrary orders. This platform would also encourage buyers and developers to have open discussions and exchange information. The integrated website will also provide homebuyers with all the current updates regarding the housing sector.  

"We are working to introduce a common platform where RERAs of all states and UTs, can exchange their views. With this, RERA will be stronger," Housing and Urban Affairs Secretary Durga Shanker Mishra, was quoted as saying in a PTI report. The centre will provide all the assistance needed for the creation of this platform.  

Under the Real Estate (Regulation & Development) Act, 2016, all states are mandated to constitute their respective real estate regulator which provides protection to homebuyers. So far, over 42,000 projects have been registered under RERA. Over 32,000 real estate agents have been registered under various state authorities.  

The RERA has been implemented across 30 states and UTs across the country. West Bengal and four north-eastern states have yet to set up the authority. 

In another announcement, the housing ministry said that homebuyers investing in a property through the Pradhan Mantri Awas Yojana-Urban (PMAY-U) would not be able to avail of benefits under the credit-linked subsidy scheme (CLSS) if the project was not registered with RERA. 

With inputs from Housing.com News