A high-level committee of the Uttar Pradesh Government has come out with recommendations that are aimed at providing a solution to the completion of homes in the stalled projects of Noida, Greater Noida and Yamuna Expressway.
The committee, chaired by Durga Shankar Mishra, the Secretary in the Ministry of Housing and Urban Affairs (MoHUA), was formed by the state government through its order dated June 18, 2018 to address the issues of home buyers and affected parties of Noida, Greater Noida and Yamuna Expressway.
The committee was given a go-ahead to identify the problems and make clear recommendations to solve the issues raised by homebuyers.
The committee held deliberations with all the concerned stakeholders including home buyers association, developers and their association, bankers and administrative authorities before finalising its report.
In its report, the committee has made the following ten recommendations:
1. Identifying the ‘lack of fund’ and ‘non-availability of last mile funding’ as the main reason for the stalled projects, the committee’s first recommendation pertains to the Reserve Bank of India (RBI) for issuing guidelines to enable the banks to consider additional funding to complete the projects.
The RBI circular dated February 12, 2018 had put restrictions on additional funding in incomplete stalled housing projects by classifying the loans as NPAs.
2. The second recommendation pertains to Last-In-First-Out (LIFO) model for execution of stress fund to ensure the confidence of investor to put its money in order to complete the stalled projects, as currently, nobody wants to put money in stalled projects considering there is no guarantee of a return on their investment.
3. The committee has recommended introduction of Project Settlement Policy (PSP) by UP state government with certain modifications. The PSP was launched earlier by the authorities but no developer had availed the same. However, since the situation is more critical now than before, PSP for fixed 6 months’ period has been recommended, where the developer would have to give a written undertaking to complete the projects within 3 years, otherwise the benefits of PSP shall be taken back and all the dues shall be recovered from developer by the concern authority.
This would ensure that the PSP helps in completion of the stalled projects and its benefits are not misused by the developers.
4. To avoid multiple sales of single property, the committee has recommended that the “Agreement to Sale” to be registered in the office of concern Sub-registrar with a nominal registration fee. It will help secure the interest of the home buyers.
5. The committee has recommended the establishment of one Real Estate Regulatory Authority in Noida or Greater Noida to readdress the issue of home-buyers of the Noida, Greater Noida, Ghaziabad and nearby areas on a regular basis.
6. The committee has also recommended permitting the affected home buyers to get the title deed registered on stamp duty at the rate prevailing at the time of the committed date of the completion of the project by the developer. It will give huge monetary benefits to each affected individual home buyer.
7. In its seventh recommendation, the committee has recommended that the development authorities should come up with a policy for taking over the unused land/floor area ratio (FAR) of the stalled projects, where no third-party interest has been created. It aims to instill a sense of discipline among the developers and penalise the defaulters.
8. The committee has further recommended the preparation of a panel -Lawyers of RERA to assist the homebuyers in pursuing their cases before RERA Authorities at reasonable fees.
9. The committee has further asked the National Buildings Construction Corporation (NBCC) to conduct more surveys of stalled projects of developers and take up a few select viable projects to complete them.
10. Further, the committee recommended that there is no common solution to all stalled projects. It stated that the authorities may continue to explore project wise mitigation plans and implement the same within their jurisdiction areas.
The committee estimated that 7-8 lakh flats had been planned to be built in Noida and Greater Noida. The construction of these flats started during 2007-15.
However, around three lakh homebuyers are affected due to non-delivery of booked flats in these stalled projects despite making substantial part payment for the same.
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