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The Noida Authority has announced that it will issue recovery certificates to builders who are not participating in its schemes to clear outstanding dues. The move is part of the Authority's efforts to generate revenue and ensure timely completion of projects.
The Authority has launched several schemes to help builders clear their dues, including a one-time settlement scheme and a scheme that allows them to surrender their land in lieu of the dues. However, some builders have not shown interest in these schemes, prompting the Authority to take more stringent measures.
According to officials, the Authority will issue recovery certificates to such builders, which will enable it to recover the dues by attaching their properties. The certificates will be issued under Section 17 of the Uttar Pradesh Revenue Code.
The move is expected to bring in much-needed revenue for the Authority, which has been struggling to generate funds due to the economic slowdown caused by the Covid-19 pandemic. The Authority has also been facing criticism from homebuyers who have been waiting for years for their homes to be delivered.
The Noida Extension Flat Owners Welfare Association (NEFOWA) has welcomed the move. "It's a good step by the Noida Authority. We have been urging the Authority to take strict action against builders who have not cleared their dues. This will ensure that the projects are completed on time and homebuyers get their flats," said Abhishek Kumar, president of NEFOWA in an interview captured by ET Realty.
The Noida Authority has decided to take strict actions against builders who owe large amounts in land dues but are not showing any interest in the reschedulement or flat-wise payment schemes to clear their liabilities. The reschedulement scheme was designed to provide relief to developers who owe significant liabilities to the Authority by allowing them to pay the amount in instalments over two years. However, only two builders have taken advantage of the facility so far, and the scheme will expire in the next 15 days.
If defaulting builders fail to clear their dues even after the issuance of the recovery certificates (RC), the Authority can attach and auction their property to recover the amount owed. According to official data, there are 34 projects in the city that have been completed but owe over Rs 1,550 crore in dues. During a review meeting in March 2023, CEO Ritu Maheshwari ordered the issuance of RCs against them.
The Noida Authority's decision to issue recovery certificates to defaulting builders is a step towards ensuring timely payment of land dues and promoting financial discipline in the real estate sector. However, the reluctance of builders to take advantage of the reschedulement scheme may indicate financial distress in the industry, which is worth considering. Nonetheless, the Noida Authority's move will hold defaulting builders accountable and serve as a warning to other builders who may have similar intentions.
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