Delink registries from land dues, UP-RERA suggests to state government

NOIDA: The Uttar Pradesh Real Estate Regulatory Authority has recommended to the state government that the registry of flats in completed real estate projects should be delinked from the dues builders owe to the Noida and Greater Noida authorities so that homebuyers can get relief. A stalemate between development authorities and builders over Rs 39,000-crore land dues has kept nearly
40,000 homebuyers in the two cities waiting for the registry of their flats for years. In its report on the status of real estate projects and measures to revive them, UP-Rera suggested Noida and Greater Noida authorities have the power to recover dues by seeking security in other projects or personal assets of the developers, or by issuing recovery certificates.

UP-Rera chairman Rajive Kumar said the report was submitted to the state government last week. The
regulatory authority hired a consultant in April this year with a mandate to prepare a report suggesting a
possible roadmap as the deadlock has halted registries across residential societies in Noida, he said.
Over 200 residential projects were categorised based on their physical and financial status in the report.
Of them, UP-Rera studied eight projects and found six of them were “viable and could be revived”. Apart
from the completed projects, the report also talks of two types of stalled projects: ones where no work has
been done over the years and others that are delayed at the moment due to the liquidity crunch but are viable. Over 1.25 lakh homebuyers have been affected due to stalled projects in the two cities.

The report suggested the Noida and Greater Noida authorities can cancel land allotments and resell stalled
projects with no possibility of revival. To safeguard the interests of homebuyers, the authorities could also
auction the builder’s properties, it added.
In the case of stalled but viable projects, it said, the authorities can introduce a co-developer policy,
wherein a second developer would take over a project, complete it and clear the dues. Incentives, such as
an interest rate rebate, can be provided to such a co-developer. Other measures include allowing builders
to surrender land or taking control of surplus lands for sale to recover dues.
The report highlighted the need for the two authorities to assess projects on a case-by-case basis,
considering their unique problems. It suggests adopting a flexible approach rather than imposing uniform
rules.
Some projects, Kumar said, can be completed if the authorities provide them support in terms of zero
periods for the time lost in completing the construction due to reasons, like the Covid-19 pandemic and
NGT orders banning construction time and again.
The report also proposed a reverse corporate insolvency resolution process (CIRP) for projects
undergoing insolvency proceedings in the National Company Law Tribunal (NCLT), where a promoter is
given the opportunity to revive the company and act as a lender or financial creditor.
The authorities’ ability to recover their dues in NCLT cases is currently limited to around 30%.
The UP-Rera has also emphasised the importance of not taking harsh decisions on projects that are being
completed with the SWAMIH (Special Window for Affordable and Mid-Income Housing) funds.
“Now is the right time to intervene and take measures to revive the real estate industry in the region. The
market is improving, so the effects of the measures taken by the government will be maximum. A positive
environment will not boost the confidence of developers but also provide relief to lakhs of homebuyers,”
Kumar said.The state government, the Rera chairman said, is looking for ways to address the real estate
problems in Noida. At the national level, the Union ministry of housing and urban affairs has set up a
committee, led by former NITI Aayog CEO Amitabh Kant, to resolve the stalemate over stalled housing
projects across the country.
Realtors, too, have sought a rebate on the penal interest accrued by them over the years they defaulted on payments. Earlier, they met Kumar and the infrastructure and industrial development commissioner
(IIDC) Manoj Kumar Singh over their demands.