Defaulting builders should not be given three-year time to complete stalled projects: FPCE, ET RealEstate

August 30, 2023

NEW DELHI: Homebuyers’ body FPCE has suggested that concessions to real estate developers should be provided only for legacy stalled housing projects and said defaulting builders should not be given blanket three-year extension in timeline for the completion of such projects.

Forum For People’s Collective Efforts (FPCE) President Abhay Upadhyay has written a letter to Union Housing and Urban Affairs Minister Hardeep Singh Puri, expressing concerns on some of the recommendations made by Amitabh Kant-led committee that was constituted to examine the issues related to legacy stalled projects.

The 14-member panel led by former NITI Aayog CEO Amitabh Kant presented the committee’s report to Puri on August 21.

Changes in the insolvency law and formulating a scheme offering subsidised interest rates are among the several measures suggested by the expert panel to the Centre for reviving stalled real estate projects in the country. There are more than four lakh housing units in the stalled projects.

In his letter, Upadhyay said the ministry should sent an addendum while circulating the panel’s report to various states and/or any other government departments.

It should be mentioned that “the concessions and exemptions given to the builders and/or projects in the report will be limited to only legacy stalled projects. Such projects should be identified and categorised as such to prevent any possible misuse,” the letter said.

The extension for projects, if any granted, should be on a case-to-case basis and on the basis of timeline required to complete the projects in normal circumstances and no blanket extension of three years should be given, as per FPCE.

“All such builders whose projects are stalled or delayed for more than two years should be blacklisted and barred from launching new projects in future,” Upadhyay said.

Also, the association said the committee’s recommendation for a fresh, blanket extension of projects for three years raises significant concerns.

This proposed extension does not consider timeline needed for completion of projects on a case-to-case basis which in many cases may be much lesser than the three-year period and secondly it lacks a compensatory provision for suffering homebuyers, the association said.

“This could potentially offer relief to builders but at the detrimental cost and continued suffering of homebuyers who have already endured prolonged project delays and an additional three year extension without any compensation may completely break them both financially and mentally,” Upadhyay said.

This not only raises concerns about fairness of the revival package as recommended by the committee but also reflects an insensitive and unjust approach to homebuyers) hardships, he added.

He said the report has some very good recommendations to facilitate possession of dream homes to homebuyers.

“However, on deep analysis of the entire report, some very serious issues also come to the forefront which needs your kind intervention,” he said.

According to the association, the committee’s findings indicate that there are still projects not registered under Real Estate (Development and Regulation) Act, popularly known as RERA, as required.

This raises “serious concerns with regard to the effectiveness, integrity, and commitment of the RERA Authorities to enforce the regulations set forth by RERA”, Upadhyay said.

In one of the recommendations, FPCE said the committee has given project selection criteria that reads as “Projects which were started before 2018 and are more than two years delayed can participate in the State Government/RERA led resolution process”.

On the recommendation, Upadhyay said the committee’s recommendation includes projects that were started after the enactment of RERA in 2016, which seems to go beyond the scope of addressing only legacy stalled projects.

“This clearly suggests that even projects initiated after the implementation of RERA are experiencing delays and issues. This again raises doubts about the effectiveness and functioning of RERA in preventing project delays and ensuring timely completion which was one of the prime objectives of RERA,” he added.

Further, FPCE has recommend for establishment of a ‘RERA Monitoring Committee (RMC)’ primarily composed of homebuyers, distinguished independent individuals, and reputable non-profit organisations.

Notably, this committee should exclude any involvement of builders or their organisations, it added.

“RMC’s primary role would be to scrutinise the deviations, operational practices, and overall functionality and intent of the RERA authorities, ensuring they are aligned with the true spirit of RERA implementation.

“RMC could present its findings to the Central Advisory Council during its meetings,” Upadhyay said.

  • Published On Aug 30, 2023 at 06:15 PM IST

Join the community of 2M+ industry professionals

Subscribe to our newsletter to get latest insights & analysis.

Download ETRealty App

  • Get Realtime updates
  • Save your favourite articles

Scan to download App

Source link

Abhay Singh

Web Developer

Leave a Comment