Realtors demand Haryana like scheme to settle financial dues

Realtors have demanded that the Uttar Pradesh government come up with a scheme similar to the one announced by the Haryana government to settle land dues, and said that without such a settlement scheme, group housing projects will not be delivered or revived.

The Haryana government in 2017 waived 75% interest and took only 25% interest along with principal amount from realtors, thereby helping a lot of developers to clear their dues and complete their projects.

The present demand by realtors in Gautma Budh Nagar assumes significance given that the Noida and the Greater Noida authorities have so far failed to recover pending land dues, amounting to nearly 65,000 crore, from at least 200 developers. The impasse is affecting thousands of homebuyers in Noida and Greater Noida as the construction and handover of at least 1.5 lakh flats have been delayed in the twin cities.

The developers’ lobbing groups the Confederation of Real Estate Developers Association of India (CREDAI) and the National Real Estate Development Council (NAREDCO) in a letter to the Uttar Pradesh government and the Noida and Greater Noida authorities have demanded a one-time settlement scheme without which the financial issues will not be resolved.

“Without resolving the financial dues issue, realtors will not become eligible for funding from banks. Without funds, the delay in delivery of flats will continue. Therefore, we have demanded that the Uttar Pradesh government give us a 75% waiver on interest and realtors will pay 25% interest as it was done in Haryana. If the Uttar Pradesh government does not adopt this model of 75% interest waiver, no realtor will come out of the present financial crisis which is also affecting homebuyer interests,” said RK Arora, president,UP chapter of NAREDCO.

The delegation of CREDAI and NAREDCO members in December met Uttar Pradesh chief secretary DS Mishra and also Ritu Maheshwari, the chief executive officer of Noida and Greater Noida authorities.

“We have requested the government and two authorities that they should offer interest waiver and then issue a fresh repayment plan giving additional time to realtors to pay the dues. This can resolve the land dues crisis and pave the way for flat delivery to thousands of homebuyers. If the UP government wants to resolve the issue of late delivery, then the government must take innovative steps,” said Manoj Gaur, president of CREDAI NCR and chief managing director, Gaur Group.

Realtors have also filed a plea in the Supreme Court demanding that only simple interest of 8.5% be levied on the land dues instead of penal interest that goes up to 25%, increasing the defaulted amount exponentially.

“We hope that the court will give us relief in this matter as it will help resolve the real estate crisis. But in the meantime, the Noida and the Greater Noida authorities must settle dues to protect the interest of homebuyers,” said Amit Kumar, executive director of AIMS MAX Gardenia Group.

Maheshwari said, “The UP government will take a decision on this issue.”

Arvind Kumar, additional chief secretary of UP government, said, “The UP government is looking into issues faced by the real estate sector and will take appropriate action.”