NOIDA: “The role of decision in success is 5%, and the role of implementation 95%.” This is what the state government says in its order to revive stalled projects and resume registries based on key recommendations of the Kant committee that the state cabinet approved this week.
This is what realtors and homebuyers – the former immediate gainers, the latter trickledown beneficiaries – will watch closely as conditions attached to the relief measures become apparent from a reading of the fine print.
The zero-period relief, for one, will not be a blanket one when dues of realtors are recalculated. The Kant committee had suggested two zero periods, one for Covid (March 2020 to March 2022) and the other for construction curbs because of NGT orders (August 2013 to June 2015).
While zero-period waivers for the pandemic phase will be given to all, the state’s guidelines say waivers for the earlier 20-month period will be given on a case-by-case basis. This has dampened the mood among realtors, who said while this was better than any of the other proposals made so far on paper, they were unsure how these would translate when the dues are recalculated.
Realtors have been at loggerheads with the Noida Authority for years over a stiff interest and penalty regime that they hold responsible for an “unreasonable” bloating of their dues. Noida has maintained that the terms were part of the agreement that realtors signed when land was allotted to them and they are obligated to it. The standoff has brought registries to a standstill in Noida because many housing projects that have been delivered to buyers have not received occupancy papers (OC) since the realtors hasn’t cleared dues. It has also kept projects stalled because of cash crunch in limbo. The committee led by former Niti Aatyog CEO Amitabh Kant suggested a roadmap to end this deadlock.
Realtors’ receptiveness to the relief package is important because only after they buy into it will the relief reach homebuyers, first in the form of OCs being issued to allow registries and subsequently completion of flats in long delayed projects.
Other than the recalculation, the other condition – of paying up at least 25% of the net dues in the next two months and the remaining parts in one to three years – has also elicited a mixed response from realtors.
A developer, who did not wish to be named, said the primary objective of the order is to revive stalled projects. “This is only possible when the burden of dues on developers is reduced,” he said. “Most of the projects are stalled since 2015-16. So, if the developers were not able to pay their dues at that time, then how will they pay today when the dues have increased manifold?”
The developer pointed out that the Kant committee had also recommended an overall rebate on dues, but the state hadn’t offered that in its relief package. Another developer said both zero periods should be extended to all developers. A 24- and 46-month waiver on interest and penalties for default will make a big difference because dues are calculated in compound interest.
Another omission in the state order, realtors pointed out, is the Kant committee’s recommendation of providing additional floor area ratio (built-up area) to projects to make them economically viable. The order says the authorities will allow the utilisation of unused FAR once the charges for it are paid.
Suresh Garg, CMD of Nirala World and vice-president, Credai (western UP), said the order doesn’t give all solutions “but builders will still get a lot of relief”. “For stalled projects, options have been suggested, like a co-developer policy and partial land surrender policy. Partial surrender can reduce the burden of developers because dues will be calculated only on the remaining land from the time of allotment. This may reduce the liability of some builders drastically.”
Manoj Gaur, president, Credai NCR, and CMD Gaurs Group, said, “The final policy has come after several rounds of deliberations. The developers have also made up their minds to take advantage of the solutions within the order. Prices of unsold inventory in projects have also increased. At present, the market is positive and there is positive cash flow. Banks are willing to give loans. So overall, it’s a step towards a solution, even as no strength is left in developers to get into further litigation.”
Homebuyers who have been residing in unregistered flats can look forward to ownership rights within the next three months if the relief measures extended to realtors work. Homebuyers in Greater Noida, who demonstrated every Sunday for a year, will conclude their protest and hold a celebration.
Abhishek Kumar, president, Noida Extension Flat Owners’ Welfare Association (NEFOWA), said, “On Sunday, we will announce the end of our protest. We are hoping the authorities will soon clear the deck for registry of flats.”
