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The Uttar Pradesh Real Estate Regulatory Authority (UP-Rera) has made a recommendation to the state government regarding the registry of flats in completed real estate projects. The suggestion is to delink the registry process from the outstanding dues that builders owe to the Noida and Greater Noida authorities. This proposal aims to provide relief to homebuyers who have been waiting for the registry of their flats due to a stalemate between the development authorities and builders over Rs 39,000 crore land dues.
The UP-Rera submitted a report on the status of real estate projects and measures to revive them to the state government. To prepare this report, the regulatory authority hired a consultant in April to propose a possible roadmap for resolving the deadlock that has halted registries across residential societies in Noida. The report categorized over 200 residential projects based on their physical and financial status. Out of these, UP-Rera focused on eight projects and identified six of them as viable and capable of being revived.
In addition to completed projects, the report also addressed two types of stalled projects: those with no progress over the years and those currently delayed due to a liquidity crunch but still viable. The impact of stalled projects has affected over 1.25 lakh homebuyers in Noida and Greater Noida.
The report suggested that the Noida and Greater Noida authorities should have the power to recover dues by seeking security in other projects or personal assets of the developers, or by issuing recovery certificates. It also proposed that the authorities could cancel land allotments and resell stalled projects that are beyond revival.
To protect the interests of homebuyers, the authorities could auction the properties of defaulting builders. For stalled but viable projects, the report recommended implementing a co-developer policy where a second developer takes over the project to complete it and clear the dues. Incentives, such as interest rate rebates, could be provided to such co-developers. Other measures included allowing builders to surrender land or taking control of surplus lands for sale in order to recover dues.
The report emphasized the need for a flexible approach by the authorities, assessing projects on a case-by-case basis and considering their unique problems instead of imposing uniform rules. Some projects could be completed with support from the authorities, such as granting zero periods for the time lost due to reasons like the Covid-19 pandemic and repeated orders from the National Green Tribunal (NGT) banning construction activities.
Furthermore, the report proposed a reverse corporate insolvency resolution process (CIRP) for projects undergoing insolvency proceedings in the National Company Law Tribunal (NCLT). This process would give the promoter an opportunity to revive the company and act as a lender or financial creditor. Currently, the authorities' ability to recover dues in NCLT cases is limited to around 30%.
The UP-Rera also highlighted the importance of not making harsh decisions on projects that are being completed with the support of the Special Window for Affordable and Mid-Income Housing (SWAMIH) funds.
Realtors have also raised their concerns and demands, including seeking a rebate on the penal interest accrued over the years due to their payment defaults. They have engaged with Rajive Kumar and Manoj Kumar Singh, the Infrastructure and Industrial Development Commissioner (IIDC), to discuss their requests.
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