The government has decided to extend the registration and completion date suo-moto by six months
Regulatory authorities can extend this for a period of up to three months, if needed
New Delhi: Yielding to the request made by the real estate sector, the government has said that the COVID-19 period will be treated as an event of Force Majeure under RERA (Real Estate Regulatory Authority) Act. The announcement was made by Finance Minister Nirmala Sitharaman on Wednesday. She added that an advisory will be issued in this regard by the Ministry of Housing and Urban Affairs to the states and Union Territories and their regulatory authorities soon.
Completion date of real estate projects extended by 6 months
While noting that the COVID-10 pandemic has left an adverse impact, the minister said that real estate projects stand the risk of defaulting on RERA timelines because of the nationwide lockdown. In order to provide some relief, the government has decided to extend the registration and completion date suo-moto by six months for all registered real estate projects expiring on or after March 25 without individual applications, Sitharaman said. She added that regulatory authorities can extend this for a period of up to three months, if needed. Fresh ‘Project Registration Certificates’ will be issued automatically with revised timelines. Timelines for various statutory compliances under RERA will also be extended.
“These measures will de-stress real estate developers and ensure completion of projects so that homebuyers are able to get delivery of their booked houses with new timelines,” Sitharaman said.
Hardeep Singh Puri welcomes relief measures
Welcoming the slew of measures announced by the Finance Minister for the real estate sector, Union Minister for Housing and Urban Affairs Hardeep Singh Puri said on Twitter, “Relief measures announced by @FinMinIndia for India’s real estate sector will benefit home buyers, builders & other stakeholders who have been demanding these initiatives to counter the adverse effect of the pandemic crisis on construction activities in our urban areas.”
Relief measures announced by @FinMinIndia for India's real estate sector will benefit home buyers, builders & other stakeholders who have been demanding these initiatives to counter the adverse effect of the pandemic crisis on construction activities in our urban areas. pic.twitter.com/thZHOKu9r2— Hardeep Singh Puri (@HardeepSPuri) May 13, 2020
What is force majeure?
It is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as a war, strike, riot, crime, plague, or an event described by the legal term act of God (hurricane, flood, earthquake, volcanic eruption, etc.), prevents one or both parties from fulfilling their obligations under the contract. In practice, most force majeure clauses do not excuse a party’s non-performance entirely, but only suspend it for the duration of the force majeure.