Updated December 26th, 2023 at 15:44 IST
Decoding the impact: What UP's nod to Kant panel suggestions means for over 2 lakh homebuyers
The cabinet approved a crucial proposal for the implementation of a zero period, waiving interest and penalties for financial defaults by developers.
The Uttar Pradesh (UP) Cabinet had given approval to the recommendations made by the Amitabh Kant committee concerning stalled legacy projects, benefiting over 2 lakh homebuyers earlier this week. One significant proposal accepted by the cabinet was the implementation of a zero period to waive interest and penalties for financial defaults by developers.
The Amitabh Kant committee suggested immediate execution of registry and sub-lease deeds for homebuyers, a move pending an official order from the UP government. The proposed zero period, spanning from April 1, 2020, to March 31, 2022, aimed to address disruptions caused by the COVID-19 pandemic in the real estate sector. This period allows the government to waive penal interest and other dues on projects facing legal disputes or land-related issues, provided developers commit to completing the projects within a specified time frame.
Debt relief for developers
Developers in UP, collectively owe approximately Rs 46,000 crore to development authorities, with significant amounts owed to the Noida Authority, Greater Noida Authority, and Yamuna Expressway Authority, according to media reports. The zero period policy offers relief by reducing penalties and other dues, contingent on developers completing projects within the stipulated time.
Registry relief awaited
For homebuyers, the decision directly impacts those awaiting registry completion despite having possession. This move is expected to benefit individuals who have been waiting for apartment registration for years after investing crores. The president of the Noida Federation of Apartment Owners Associations (NOFAA), Rajiva Singh, anticipates immediate relief for the 1.9 lakh stressed inventories in Noida.
The impact on developers is notable, as pending dues often lead to project delays and hinder registration processes. The financial relaxation recommended by the committee enables developers to complete stalled projects, contributing to increased revenues for authorities and the state exchequer. This decision fosters a mutually beneficial environment for the growth of the NCR real estate sector, according to LC Mittal, Director, Motia Group.
Delayed projects impact
Real estate consultant ANAROCK highlights Noida and Greater Noida as having the highest concentration of stalled and delayed residential projects, accounting for over 35 per cent of the total delayed units across the top seven cities. Manoj Gaur, president of CREDAI NCR and CMD of Gaurs Group, believes the government's decision directly benefits a substantial number of the 2.4 lakh homebuyers in the National Capital Region (NCR), addressing both developer concerns and conveying a positive message to the real estate industry.
Published December 23rd, 2023 at 15:18 IST