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The Real Estate Regulatory Authority (RERA) recovery certificates (RCs) were introduced with the promise of delivering solace to distressed homebuyers in Noida, Uttar Pradesh's largest real estate market riddled with issues like project delays and incompletions. However, recent data reveals a disheartening reality - a mere 5% of the RCs issued by the real estate ombudsman since 2018 have actually been recovered, leaving homebuyers in continued turmoil.
Noida, the epicentre of the state's real estate market, has been grappling with a multitude of problems, particularly those stemming from delayed project deliveries and unfinished ventures. Under two key provisions, Section 40 (1) of the UP RERA Act and Rule 23 of UP-RERA Rules, aggrieved homebuyers have the right to approach RERA against developers who default on refunds. However, the execution of RCs falls under the purview of district administrations.
Startling statistics shared by Noida's administration reveal a stark reality. Out of the 2,352 RCs issued since 2018, collectively amounting to a staggering Rs 875.6 crore, only 118 RCs worth Rs 98.6 crore have been successfully recovered as of July 2023. This meagre sum accounts for just 5% of the total RCs issued, casting doubts on the efficacy of the recovery mechanism.
While RERA officials point out that RC executions picked up post the pandemic, with an additional recovery of Rs 196 crore in 2023, this amount has yet to reflect in official logs. Notably, Wave Group cleared Rs 96 crore in RC dues in June, and an additional Rs 100 crore was recovered between January and March this year.
Officials cite instances where RCs are resolved through mutual agreement between developers and homebuyers. However, a significant hurdle arises when these agreements aren't communicated to RERA or the administration. Consequently, these RCs continue to be categorized as 'unrealized' on official records.
Noida leads the pack with 945 out of around 3,400 registered group housing projects under RERA, followed by Lucknow with 702 projects and Ghaziabad with 418.
A senior Noida administration official disclosed that the actual number of recovered or resolved RCs might surpass the recorded figures. However, certain RC execution cases are mired in the National Company Law Tribunal (NCLT) and various courts, rendering the district administration powerless in their execution.
Legal experts opine that RERA should invoke its powers under Rule 24 to expedite RC execution proceedings. They suggest setting deadlines for compliance reports from the collector's office. Lamentably, it appears that RERA, along with district administrations, has become a legal cushion for defaulting developers, leading to the low execution rates of RCs not only in Noida but across the state.
Since 2018, RERA has issued nearly 8,800 RCs, totalling around Rs 2,400 crore, across the state. Of these, roughly Rs 1,200 crore worth of RCs have been resolved through recovery and settlement, leaving the rest in a state of uncertain limbo for distressed homebuyers.
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