Noida extends date for rescheduling of land dues for developers

In the wake of the coronavirus (Covid-19) pandemic, the Noida authority on Saturday said it has extended the date to reschedule pending land dues owed to the authority till September 30.

The authority’s finance controller, Sudhir Singh, has issued an order asking developers to take benefit of this opportunity to reschedule their outstanding amount as per rules and start paying pending dues.

According to the earlier order issued on February 19 this year, developers were asked to get their dues rescheduled by the end of April. But they could not do so due to the national lockdown.

“Therefore, we have now extended the date to September-end for developers and other allottees such as industrial and institutional plot owners,” said Singh.

The authority had allotted housing land to developers after accepting 10% down payment of the land cost, and the builders were supposed to pay remaining 90% cost in instalments. But due to slowdown in the real estate sector, several builders failed to pay dues on time. As a result, they were asked to get their outstanding rescheduled and start paying up in instalments.

According to officials, the authority struggles to recover about Rs 25,000 crore in land dues from at least 100 developers.

NO PENAL INTEREST ON DEFAULTERS

The authority has also decided to stop imposing penal interest against defaulting builders, as the UP government has waived it off in the wake of the pandemic. On June 9, the state government had asked the Noida, Greater Noida and Yamuna Expressway authorities to reduce the interest rates on land dues for builders and other allottees in view of the coronavirus crisis.

“Developers need to deposit dues without penal interest, restart construction and deliver flats to aggrieved homebuyers. The authority has waived off penal interest for developers. But realtors will have to submit an affidavit stating they will pass on the benefit to homebuyers,” said Ritu Maheshwari, chief executive officer, Noida authority.

Earlier, defaulter builders had to pay a penal interest of up to 20% on dues, thereby increasing the total default amount. The state government has asked authorities to levy simple interest on financial dues as per the marginal cost of funds-based lending rate (MCLR) revised by the Reserve Bank of India, said the officials. Now, the authorities shall levy simple interest of 8% on dues, said the officials.

“It was a long standing demand of developers that the authority should not impose exorbitant penal interest up to 20% on dues as it affects the realty project’s economic viability. Now, the Supreme Court also directed the three authorities to levy only simple 7-8% interest on dues. It will revive the sector and enable developers to deliver stuck projects,” said RK Arora, Uttar Pradesh president of National Real Estate Development Council (NAREDCO), a developers’ group.