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Government committed to uphold and protect interest of homebuyers while ensuring ease of doing business in real estate sector

Today’s measure to safeguard interest of home buyers for ensuring completion and getting delivery of flats/homes although with a delay of few months
 

The Government is committed to uphold and protect the interest of homebuyers while ensuring ease of doing business in the real estate sector. Subsequent to the announcement made by the Union Finance Minister Smt. Nirmala Sitharaman’s in a press conference, here today, in order to protect the interest of homebuyers, Central Government has issued an advisory to all States / UTs and their Real Estate Regulatory Authorities to automatically extend registration of all real estate projects registered under RERA by 6 months and further upto 3 months, if required in view of the COVID-19 pandemic.

MoHUA has issued an Advisory to all States / UTs and their respective Real Estate Regulatory Authorities to treat the pandemic COVID-19 as “force majeure” being a natural calamity, as it is adversely affecting the regular development of the real estate projects and automatically extend registration of all real estate projects registered under RERA, which were due on or after  25th March, 2020,  by 6 months  and for further period of upto 3 months, if the situation in a particular state or any part thereof needs special consideration in view of the COVID-19 pandemic. No individual applications will be needed to get this extension. Regulatory Authorities will issue fresh ‘Project Registration Certificates’ with revised timelines for such projects which were due to be completed anytime or extended to be completed after 25th March, 2020. Further, all timelines for compliances will get changed concurrently.

 This measure will save the projects and enable the developers to complete the projects within the revised time lines thereby safeguarding the interest of home buyers as it will ensure delivery of their booked flats/homes within the revised time line.  Delay of few months is certainly better than not getting booked houses at all.  It is pertinent to mention that homebuyers’ interest has been safeguarded by recent announcement by RBI through moratorium of 3 months allowed to all borrowers.

An urgent meeting of the Central Advisory Council (CAC) of RERA was held on 29th April, 2020 under the chairmanship of Minister of State (I/C), Ministry of Housing and Urban Affairs, wherein it was decided unanimously to recommend to issue the advisory by the Central Government to treat the current pandemic as force majeure under RERA for a period of 6 months and allow additional 3 months to be extended by the Regulatory Authorities in whole or part of State, if the situation so demands.

 In past a lot of projects got stalled due to various reasons leaving lakhs of homebuyers in a very difficult situation where they were running from pillar to post for their booked homes; for exampleJapyee and Amrapali projects in NCR, wherein NBCC has been entrusted the task to complete the flats or matter is before NCLAT. Therefore, it is vital to take remedial measures now to ensure that COVID-19 does not lead to a complete breakdown of the real estate sector. Accordingly, in the prevailing circumstances, the primary objective is to address the concerns of homebuyers by ensuring suitable regulatory relief to the real estate projects so as to create a WIN-WIN situation for all the stakeholders – it will enable developers to complete the projects so that home buyers get the delivery of their booked houses within the revised timeline.

Ministry of Housing and Urban Affairs (MoHUA) had wide consultations with all stakeholders including homebuyers, developers, Real Estate Regulatory Authorities etc., and discussed all related issues threadbare to address the situation created by the pandemic, COVID-19 so that home buyers may get the delivery of their houses/flats, which is the main intent of RERA.

It emerged from these consultations that in view of the ensuing monsoon season followed by festivals like Dussehra, Diwali, Chatth etc., the workers may not return early. Also, it will take a while to setup logistic chain of material.  It is quite clear that in such circumstances, work on the real estate projects will take quite some time to restart in full gear. 

In the absence of urgent remedial regulatory measures under Real Estate (Regulation and Development) Act, 2016 [RERA], there is also a possibility of many real estate projects getting stalled leading to litigation etc. This may ultimately result in non-delivery of flats to the homebuyers, who have invested their lifetime savings for their dream homes.

Due to situation created by the COVID-19 pandemic, nation-wide lockdown was announced w.e.f. 25th March, 2020. As a result, the construction works of ongoing real estate projects were halted leading to reverse migration of labourers to their native places. Further, there has been large scale disruption in the supply chain of construction material. Both reverse migration of labourer and disruption in logistic chain have adversely impacted the construction activities across the country.

Government committed to uphold and protect interest of homebuyers while ensuring ease of doing business in real estate sector
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