New Delhi: Homebuyers awaiting the possession of their homes in Noida finally have some ray of hope as a high-level committee has come up with a slew of recommendations to speed up stalled projects. While noting that one of the biggest problems behind projects getting stalled is the ‘lack of fund’ and ‘non-availability of last-mile funding,’ the committee asked the Reserve Bank of India (RBI) to issue guidelines to banks to fund this gap.
An official statement released by the committee, which was constituted by the UP government under the chairpersonship of Secretary, Ministry of Housing and Urban Affairs (MoHUA), noted that nobody wants to put the money in the stalled projects as there is no guarantee of return on their investment. Therefore, it recommended a Last-In-First-Out (LIFO) model for execution of stress fund to ensure the confidence of the investor to put its money in order to complete the stalled projects.
The committee called for the establishment of a Real Estate Regulatory Authority (RERA) in Noida or Greater Noida, to address the issue of home-buyers of Noida, Greater Noida, Ghaziabad and nearby areas on a regular basis and also mandated that a panel of lawyers must be there to assist homebuyers in pursuing their cases before RERA at reasonable fees.
With respect to the Project Settlement Policy (PSP) launched by the UP government earlier, the committee noted that since no developer had availed the scheme, the situation has become more critical than before. In order to fix it, the government-appointed panel has recommended PSP for a fixed six-months’ period, wherein the developer has to give a written undertaking to complete the projects within three years, otherwise, the benefits of PSP shall be taken back and all the dues shall be recovered from the developer by the concerned authority.
This would ensure that the PSP helps in completion of the stalled projects and its benefits are not misused by the developers. The committee called for the establishment of a Real Estate Regulatory Authority (RERA) in Noida or Greater Noida, to address the issue of home-buyers of Noida, Greater Noida, Ghaziabad and nearby areas on a regular basis and also mandated that a panel of lawyers must be there to assist homebuyers in pursuing their cases before RERA at reasonable fees.
The recent recommendations came just a few months after the committee had asked NBCC to explore the possibility of taking up selected stalled projects. The issue is a burgeoning crisis that has impacted not just buyers but also real estate firms and their lenders. The crisis, which has been continuing for a while, has been further exacerbated by depressed market conditions that have reduced the demand for flats and choked bank funding. With the projects running years behind schedule, buyers who had opted for construction-linked payment schedule have stopped payments, accentuating the cash flow problem for the realtors.
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