‘Measure taken to safeguard interests of homebuyers, ensure that projects do not get stalled due to disruptions caused by COVID-19 pandemic and flats get delivered albeit with some delay, he said in a series of tweets.’
As many as 23 state RERA Authorities have so far extended registration of projects by six months and one by nine months following the situation created by the coronavirus pandemic and this has been done to safeguard the interests of homebuyers, housing and urban affairs secretary Durga Shanker Mishra has tweeted.
As advised by the ministry, this has been done ‘suo moto’ to cut down unnecessary paperwork and delay, he said.
“Interests of homebuyers have got squarely ensured via extension. RERA is to safeguard interests of homebuyers and that has been done,” he tweeted.
Homebuyers with lifetime savings invested in dream home project are interested in flats/homes and not litigation or ‘making developers get failed,’ he said in a series of tweets.
He noted that some citizens had raised concerns on social media against the extension given to real estate projects through the ministry’s advisory to states/RERA to complete the projects.
“This has been done as an essential measure to safeguard the interest of homebuyers,” he said.
With COVID-19 having impacted construction work, real estate projects will take quite some time to resume fully.
“Due to COVID-19 works of ongoing real estate projects have halted. Large-scale reverse migration of labour and huge disruptions in supply chain of materials have adversely impacted construction works. Labour is least likely to return before festivals in October-November get over,” he tweeted.
In such circumstances, real estate projects will take quite some time to resume work fully. Surely this will delay completion leading to lot of litigations for non-compliance of commitments on time and make projects fail/get stressed, he said.
Hence, in order to safeguard the interest of all stakeholders, especially homebuyers and to ensure delivery of houses/flats to them, the ministry had advised states/RERA to invoke the force majeure clause under the law, the tweet said.
He also said that the RBI had allowed a moratorium of six months until August 31 to homebuyers for the payment of dues in view of the coronavirus. Hence, borrowers get effectively nine months to put their accounts in order without getting NPA.
“These measures have been taken to ensure that projects do not get stalled due to disruptions caused by COVID-19 pandemic and flats/homes get delivered to the homebuyers albeit with some delay,” the tweet said.
The Centre, on May 13, issued an advisory asking real-estate regulators in states and union territories to extend by at least six months the deadline for completion of projects in the face of the coronavirus outbreak.
The outbreak of COVID-19, the respiratory illness caused by the coronavirus, be treated as an “act of God” and a “force majeure” event under the Real Estate Regulatory Authority (RERA) Act, the housing and urban affairs ministry said in the advisory.
The deadline for RERA projects that were registered or were to be completed by or on March 25 be extended, it said, giving relief to the stressed sector. The advisory came a few hours after Finance Minister Nirmala Sitharamantold media that the deadline would be extended.
The Rajasthan Real Estate Regulatory Authority became the first authority to have issued the order extending by a year the deadline of projects registered before March 19, 2020, waiving off the fee for the extended period.
Maharashtra RERA and Gujarat RERA authorities have extended by six months the completion deadlines for real estate projects in their respective states.
UP RERA also extended the deadline for completion of real estate projects by six months in the face of the coronavirus outbreak.
Meanwhile, pointing out that extension of project timelines comes with an additional burden of EMIs, rent and mental agony, homebuyers in a letter to prime minister Narendra Modi had said last month that the Centre’s advisory asking real-estate regulators (RERA) in states and union territories to extend by at least six months the deadline for completion of projects in the face of the coronavirus outbreak is “illegal and beyond the powers under the law.”
Homebuyers, had requested the PM to issue directions to MoHUA to modify its advisory on force majeure due to Covid-19, to be in line with section 6 of RERA, and that to only for the actual period of lockdown when construction was not permitted, without any further liberty to the authorities to extend.
“Anything other than this, is patently illegal and should not be promoted by the very custodians of the law,” the letter said.
“It has become a practice amongst the regulatory authorities to provide indiscriminate extension to real estate projects without following the requirements of the law (Section 6), which clearly stipulates that an extension can only be given ‘when there is no default on the part of developers and only on grounds of Force Majeure’.