The rehabilitation package introduced by the Uttar Pradesh government for real estate developers in Noida has received a lukewarm response from the industry. Out of the 57 realtors eligible for the package, only 13 have submitted consent letters to the Noida Authority, agreeing to the terms. Additionally, ten companies with the highest outstanding dues have neither attended any meetings nor applied for rescheduling their payments. This lack of response is a setback for the package, which aimed to revive stalled projects and benefit homebuyers awaiting registry or possession.
Limited Participation Hampers Recovery Efforts
The UP government’s relief package was designed to address the challenges faced by real estate developers in completing stalled projects. This initiative was particularly important in Noida and Greater Noida, where a large number of projects have impacted homebuyers and the overall real estate sector. The package included a two-year waiver of penalties and interests accumulated during the COVID-19 pandemic and provided a time-bound repayment schedule for recalculated dues. However, the limited participation of developers poses a challenge to the recovery efforts and may hamper the benefits for the real estate industry and homebuyers.
Deadline Set for Developers to Benefit from Package
To ensure progress, the Noida Authority plans to issue “final” letters to the developers requesting prompt action in clearing their dues. The CEO of the Noida Authority, Lokesh M, stated that the process cannot be prolonged and urged developers to make a timely decision on participating in the relief package. The letters will require developers to inform the Authority of their decision within a week. This proactive approach by the Noida Authority is an attempt to move the recovery process forward and provide clarity to all stakeholders involved.
Potential 32,000 Homebuyers Awaiting Benefits
If all 57 developers choose to accept the relief package, it would benefit more than 32,000 homebuyers who are eagerly waiting for the registry or possession of their properties. The package represents a significant financial commitment from developers, with an estimated repayment pipeline of Rs 8,000 crore for the collective dues owed by these 57 developers. Currently, around 1,600 flats are eligible for registry in Noida.
Implications for Developers Who Do Not Participate
Developers who do not apply for the relief package will be subjected to the existing government rules and regulations. They will be required to pay their entire outstanding dues, and the Noida Authority will take actions such as issuing recovery certificates and sealing their properties. Furthermore, no occupancy or completion certificates will be provided to these developers until they have cleared their dues.
Developers Express Concerns over Dues Re-calculation
Several developers have expressed dissatisfaction with the recalculation of dues as part of the relief package. The contention arises from the difference in recommendations between the Amitabh Kant committee and the UP government. While the Kant committee recommended two zero periods, including one during the period of construction halt due to the demarcation of an eco-sensitive zone, the UP government considered a conditional waiver. Some developers argue that considering the NGT zero period would alleviate their arrears, however, Noida’s authorities insist on a 25% upfront payment and consideration of the NGT zero period on a case to case basis. Despite the lukewarm response, the need to revive stalled projects and prioritize the interests of homebuyers remains critical. The upcoming actions and decisions from developers and the Noida Authority will significantly impact the future trajectory of the real estate industry in Noida and provide insights into the challenges and opportunities for stakeholders involved.
