Builder defied deal? Homebuyers have to approach UP-Rera again


Buyers who have lodged complaints in UP-Rera through a conciliator but are yet to get a satisfactory resolution will have to make fresh appeals to get their cases heard.

UP-Rera member Balvinder Kumar said a complainant is given two options on the regulatory body’s website — a buyer can either file a case through a conciliator, which is free of cost, or make a direct appeal to get the case heard in the Rera court.

The conciliator usually helps the builder and buyer reach an agreement, which is signed by both parties for future reference. However, several buyers have alleged that builders are yet to honour the agreements, even after months of signing them.

A group of 45 buyers of a housing project in Noida Extension had approached the conciliator over delay in handing over their flats. “We had booked our flats in 2010 and were supposed to get delivery by 2013. After six years, we approached UP-Rera through the conciliatory forum. An agreement was reached between the builder and us that they would hand over the flats by December 2019. But till date, nothing has moved. We have just wasted time,” said Bhupendra Tiwari, a buyer.

Ravindra Jain, who has bought two shops in a project, said, “I had approached the conciliator to get the penalty for delay in handover. The conciliator had made an agreement and the builder had agreed to pay the penalty. But it was not honoured later. We tried reaching out to the UP-Rera again. But the lockdown had been enforced by then.”

Arun Taneja, who booked a flat in another project, had a similar complaint over penalty. “The conditions laid down in the agreement by the conciliator have not been honoured by the builder. The terms of penalty payment that the builder had promised in the meeting have been defied by them. What are we supposed to do now?” he asked.

RD Paliwal, a conciliator for UP-Rera, said, “In most cases, builders do agree to meet the promises. But we have not been able to issue signed documents for cases heard via video conference during the lockdown. We usually put the agreements on a document and send it to both parties. If some agreements have not been honoured, we will look into them again,” Paliwal said.

Kumar said the process of approaching a conciliator first can be time-taking. “When a buyer opts for conciliation, the builder often gains time. It is better that buyers make an appeal in the UP-Rera court. If the court feels there can be conciliation, it can issue a directive. In that case, Rera has some enforcement powers, unlike in a conciliation agreement. So, if a conciliation has not been honoured, buyers will have to make a fresh appeal,” Kumar said.


Coronavirus impact | UP RERA extends deadline of real estate projects by three months

After MahaRERA and Karnataka RERA, UP RERA on April 14 extended the validity period of registration of real estate projects in the state by three months on account of COVID-19.

“In view of the dislocation of the construction activity under the real estate projects, CREDAI and NAREDCO have requested the Authority to extend the completion date of the projects as done by some other state RERAs,” UP RERA said in a statement.

In view of the slow pace of construction work due to the need for social distancing and movement restrictions and stoppage of the work following the national lockdown in March, the Authority has decided to extend by three months the date of completion of the projects with the date of completion between March 15, 2020 and December 31, 2020, it said.

The revised registration certificate of such projects will be issued separately and send to the concern promoters, the authority said in a statement.


Coronavirus pandemic | UP RERA, MahaRERA adjourn hearings until March 31

With the coronavirus outbreak causing major disruptions, the Uttar Pradesh RERA and MahaRERA on March 17 said they have decided to adjourn the hearing of all complaints until March 31.

“Due to the coronavirus pandemic, UP RERA has decided to adjourn the hearing of all complaints listed between March 18 to March 31, 2020, both at the Lucknow headquarters and the NCR regional offices,” UP RERA said in a public notice.

Rescheduled dates would be communicated soon, it said.

Homebuyers and real estate developers wanting to list urgent matters may write to Secretary, UP RERA, at, it said.

UP RERA will again review the situation at the end of the month before deciding to resume the court, it said.

MahaRERA also said in a public notice that all cases before it and the adjudicating officer shall be adjourned until March 31.

RERA Bihar has also decided to postpone all hearings of cases scheduled from March 16 to March 31, 2020, it said in a public notice on its website.

“Haryana RERA has also decided to postpone the hearing of all cases from March 18 until March 31, 2020, Dilbag Singh Sihag, member HRERA, Panchkula told Moneycontrol.

“The project/agent registration process is completely online. MahaRERA staff is allowed to work from home till further orders,” the notice said.

Real Estate (Regulation & Development) Act, 2016 (RERA) came into effect from May 1, 2017, and Maharashtra was the first state to implement it by setting up MahaRera. Midwifed by two governments – UPA II and the NDA II – between 2009 and 2016, the legislation was necessitated by the growing misery of tens of thousands of harried homebuyers.


UP Rera cancels registration of five stuck realty projects in Gautam Budh Nagar

With an aim to assist homebuyers get returns on their investments, the Uttar Pradesh real estate regulatory authority (UP Rera) cancelled the registration of as many as five realty projects located in Gautam Budh Nagar on December 6. This brings the number of deregistered real estate projects in the district to six. The move comes in light of developers allegedly failing to deliver the projects to buyers. However, the deregistrations have not yielded any result for buyers.

According to the law, the Rera has the right to deregister a project if the developer abandons it. After deregistration, a developer loses control of the project and the Rera has the right to either transfer rights to buyers or to a new developer.

The Rera gives an opportunity to the apartment buyers’ association to take over the stalled project and if this does not work out then a co-developer (a new developer) is engaged to revive and deliver the project.

The regulatory authority, which was formed under the Rera Act 2016 to address issues in the realty sector, has been unable to deliver justice due to legal hurdles.

“We had high hopes from real estate regulatory authority when it was formed in 2016. We thought it will deliver justice as promised in a time-bound manner and we will be able to either get our flats or our investments refunded. But we are clueless what to do now because filing case in Rera has provided no solution so far,” said Arun Chauhan, a buyer, whose family had bought two flats in Unnati Fortune Group’s Aranya project in Sector 119.

Officials of the Unnati Fortune Group were not available for comments even after repeated attempts to reach them.

The first time that UP Rera deregistered a project was Unnati Fortune’s Aranya – a residential project – in May this year, so as to allow the apartment owners’ association to finish it or bring in a co-developer.

“The Rera had deregistered the Aranya project and later, the matter reached National Company Law Tribunal (NCLT) before we could bring out any solution. The government has laid down a process giving models to revive the realty sector and Rera is working on available models to deliver justice,” said Rajive Kumar chairman of the regulatory authority.

Similarly, the Rera’s move to allow buyers’ associations to take over a Noida-based housing project by Shubhkamna developer was disrupted as the matter was taken to the NCLT.

Another project deregistered by the Rera is mixed-land use project Mist Avenue (Festival City), located in Sector 143 along the Noida-Greater Noida Expressway. The promoter of Mist Avenue is lodged in Delhi’s Tihar jail and hence unavailable for comment.

The rest of the projects deregistered by the Rera are all located in Greater Noida.

The authority hopes that in future, the Rera Act 2016 provides better solutions for the realty sector and its investors.

“Whenever a new law comes into being, it has scope for improvement and revision. And with time, the Rera Act 2016 will have more clarity on complicated legal issues and will be more useful to this sector. And even now it has emerged into a successful model,” said Kumar.

According to Rera officials, engaging co-developers is not easy because of debt liabilities associated with distressed projects – no co-developer has taken up any of the six de-registered projects due to liabilities and financial strains of those projects.

“Co-developers worry about the debt that a distressed realty project already has from banks or other agencies and the rules are not explicit. There needs to be more clarity about the co-developers’ liabilities and profit portion. Once this is done, bringing about a co-developer will be convenient,” said Kumar.

“We have demanded from the government that Rera should be given more powers to deliver timely justice for the realty sector. In some cases, petition in NCLT disrupted ongoing proceedings in Rera, thereby delaying justice. We demand that the Rera should address real estate sector cases first before they reach any other court, such as NCLT,” said Prashant Tiwari, president of confederation of real estate developers association of India’s (Credai) Western UP wing.


UP-RERA sends letters to over 1200 realtors informing about stress fund

New Delhi

The Uttar Pradesh Real Estate Regulatory Authority (UP-RERA) has sent letters to 1227 realtors across the state informing them about the benefit of stress fund scheme announced by central government recently.

“The step has been taken in order to ensure that the promoters of such projects are aware of the scheme so that
the projects are completed, and the home buyers of such projects are able to get their home,” said the authority in a media release.

The authority also held a meeting in November with all promoters informing them about the scheme so that they are able to apply for the last mile funds under the stress funds in time and in a proper manner.

Eligibilities which a project should meet to be able to avail the said fund:

  1. Project should be RERA registered
  2. Project is stalled due to lack of funds
  3. Project falls in affordable and middle-income group segment
  4. Project should be net worth positive
  5. Pricing of units shall not be more than Rs 1.5 crore, if the project is located in NCR region and upto or less than Rs 1 crore for rest of India
  6. Priority for projects very close to completion
  7. Carpet Area of housing units should not exceed more than 200 sq meter

The central government in November had proposed fund of Rs 25,000 crore to complete pending realty projects. Out of the total, government infused upto Rs 10,000 crore initially and the rest is to be contributed by banks, LIC and other sources.

The fund will be set up as a Category-II AIF (Alternate Investment Fund) debt fund registered with SEBI and would be professionally run. For the first AIF under the special window, SBICAP Ventures has been engaged to be the investment manager.


Big relief to home buyers! RERA moots policy to complete stalled projects

The authority recommended that such a policy can be formulated on the lines of Section 8 of the Real Estate (Regulation and Development) Act, 2016, under which it can allow completion of pending developmental work in a stalled project.

In a bid to provide relief to homebuyers in cases of stuck projects, Uttar Pradesh (UP) RERA has suggested to the state government to formulate a policy where the authority can direct homebuyers to form an association, which will then work on completing the stalled housing units. Else the authority, with participation of homebuyers, can go to the open market to hire a co-developer.

The authority recommended that such a policy can be formulated on the lines of Section 8 of the Real Estate (Regulation and Development) Act, 2016, under which it can allow completion of pending developmental work in a stalled project.

A senior state government official said UP RERA, in a letter to the state government, has suggested forming a policy on lines of Section 8. “The authority said progress of projects and timely completion is dependent on utilisation of money collected from homebuyers. To ensure this, it got around 210 projects audited and took necessary action based on the audit. It de-registered some projects and made a reference to the state government for deciding a policy about proceeding under Section 8 of the Act in such matters,” he added.

If this Section can be further utilised in a “more legalised institutional setting”, then RERA would be able to provide relief to around 25,000-30,000 home buyers. The state government is reviewing the proposal, the official said.

Section 8 provides that upon lapse of registration or revocation of registration under RERA, the authority may consult the government to take such action as it may deem fit, including carrying out the remaining development works by a competent authority or an association of allottees or in any other manner, as may be determined by it.

When contacted, UP RERA member Balwinder Kumar told FE, “We have written to the state government that first we can invite the homebuyers’ association to work with us for completing the remaining development work. If that is not possible, we will go to the open market and select a co-developer in a transparent procedure to complete pending work. It is important that we search within our own official spheres to find solutions for stalled projects.”

Another UP RERA official said top priority is providing relief through prompt hearing and complaint redressal. UP RERA’s track record proves this, he said, adding, “Before RERA, only 2,014 complaints were disposed by officials in the state of the total 5,139 registered complaints. However, this changed with formation of RERA. Around 12,780 complaints were filed and 8,506 complaints decided till August 2019.”

“Number of registered complaints in UP and their disposal by RERA is highest in the country,” the official noted. He added that there are a couple of cases in UP and Madhya Pradesh where the authority took action under Sections 7 and 8.

“The authority is also getting stressed projects inspected and has developed a mobile application for preparation and submission of reports online. These are uploaded on the web page of the project concerned. It has also issued show-cause notices to 21 projects in NCR and 17 non-NCR projects, where promoter has either not obtained completion or occupancy certificate nor applied for extension of project registration, but work is either going on or is stalled,” he explained.

UP RERA has also set up a panel of auditing firms for financial and forensic audit of projects and will soon embark upon the verification of escrow accounts of projects through the auditing firms on the panel of Institute of Chartered Accountants of India (ICAI).

At present, more than 17,900 complaints have been registered with UP RERA, which is the highest in the country. Of this, over 10,500 complaints have already been decided.


UP-RERA issues notice to Ghaziabad development body in housing scheme case


The Uttar Pradesh Real Estate Regulatory Authority (UP-Rera) has issued a notice to the Ghaziabad Development Authority (GDA) over its failure to appear before the regulator in a case related to the Indirapuram housing scheme for the economically weaker section.

The GDA, however, says the scheme doesn’t come under Rera’s purview.

The case was filed at the Greater Noida bench of UP-Rera by 60-year-old Ghaziabad resident Raj Prakash Tyagi, who has not yet got the possession of his EWS house that he was allotted 30 years ago by the GDA. The Rera bench issued five notices to GDA between February and June this year, asking its representative to appear before the regulator.

The bench has now threatened to pass ex-parte order on the basis of available documents and facts, in case GDA officials do not appear and clarify their stand, sources told TOI.

As per RERA rules, all development agencies and private builders are required to update their projects so that they can be accessed easily by the buyers and the status of the projects are in the public domain.

However, GDA chief engineer VN Singh said the EWS Indirapuram scheme was launched in 1990 and completed by 2001. “So, it does not come under Rera. The agency cannot expect the department to register the project that was completed 18 years ago. We have already submitted this reply, but despite that, the notice has been issued.”


UP-RERA to launch single window system soon


Soon, citizens, builders and developers would be able to avail several facilities offered by Uttar Pradesh Real Estate Regulatory Authority (UPRERA) through a single window system.

Citizens and developers would be able to get maps approved, lodge complaints and, secure progress reports and no-objection certificates for projects.

UPRERA chairperson Rajiv Kumar said “All information about the facility will be made available online. Citizens will also be able to file complaints in case they are duped by a developers or the builder is delaying possession of a unit and also seek information about promoters,” he added.


Builders’ current process of maintaining a collection account is wrong: UP-RERA

New Delhi

The current process of maintaining a collection account by builders to get all deposits before transferring the mandatory 70 percent of the money into escrow account is wrong, said the Uttar Pradesh Real Estate Regulatory Authority.

The realtors then transfer the remaining 30 percent of the money to third account operated by them for appropriating for purposes other than construction and land cost.

According to the authority, “This practice is apparently wrong. The promoters have to receive all the amount in the Escrow Account and only the money left after utilising 70 percent of the money for construction and land cost should be allowed to be withdrawn for a purpose other than construction and land cost. It is re-emphasized that this 70:30 percent ratio has to be maintained from the inception of the project.”

The above observation was made in a meeting held by UP-RERA officials with chief general managers and general mangers of all the public and private banks. The authority has issued appropriate directions to all the zonal heads and branch managers to comply with the RERA orders.

UP-RERA has also decided to verify all the projects accounts maintained with different banks. “The Chartered Accountants of RERA will be visiting the concerned branches in this regard,” said Rajive Kumar, chairman, UP-RERA.

The authority further said that there cannot be any charge or lien on the separate project account, the bank cannot recover the amount or installment due from the promoter from this account. The bank can have lien on the account to which the promoter transfers 30 percent of the collected money.

“The bank can not insist that in case of loan for the project the promoter should open an account with it and receive all the money from the allottees in this account. Nor can be the bank insist on the promoter to transfer the balance money from the existing project account to new account,” said Abrar Ahmed, secretary, UP-RERA.

As per the provisions of section-4 (2) (l) (D) of Real Estate (Regulation and Development) Act 2016, seventy percent of the amount for a real estate project must be deposited in a separate account to be maintained in a bank to cover the cost of construction and the land cost.

The concerned branch is required to ensure that money is utilized for the specified purpose only and not for any other purposes. The bank must also ensure that the promoter is permitted to withdraw any amount from this account only after he has submitted the certificate from an engineer, an architect and a charted accountant.


UP-RERA to propose stress fund to complete pending realty projects


In the first step towards providing some relief to homebuyers, the Uttar Pradesh Real Estate Regulatory Authority (UP-Rera) is set to propose the creation of a stress fund to complete pending real estate projects.

After tabling the proposal at its board meeting in Lucknow, the regulator will open it for suggestions and discussion, after which it is likely to send it to the UP government.

Homebuyers who invested in several projects have been demanding a stress fund to help cash-strapped builders with initial liquidity.

However, their demand has so far not received any response from the state or central government.

UP-Rera members told TOI that given the abysmal financial state of some of the projects in Noida and Greater Noida, it could be difficult for any agency to come on board to help complete construction without financial backing from the government.

“We have created a proposal. However, it will be weighed unanimously by the entire board in Lucknow. While the law takes its course to deal with the injustice by the builders towards the buyers, we, as a real estate regulator, will take a balanced and poised stance. Our objective is to help buyers get their flats. Wherever we can, we will mediate to help completion,” UP-Rera member Balwinder Kumar told TOI.

“Given the huge count of flats that are pending here where builders are in a financial mess, we now want to see if a financial package for completing these flats can be created,” he added. Kumar, however, did not divulge the fine print of the proposal.

Homebuyers cannot start making payments and banks do not offer loans in projects which are in a stalled condition, some have argued.

“The builders have to show at least some sign of construction before buyers can start paying their pending dues on projects, which have come to an absolute standstill. Whichever agency comes forth for the task of completion would need seeding liquidity which the government ought to provide through a stress fund,” Abhishek Kumar, president of the Noida Extension Flat Owners Welfare Association (Nefowa) and also a member of the UP-Rera Conciliatory Committee, said.

In June, the Forum For People’s Collective Efforts, an apex body of homebuyers, had urged the state government to set up a Rs 10,000-crore stress fund for completing pending projects in the next five years. The forum had suggested that the government should strip off personal and company assets of promoters of delayed projects to recover the amount spent for completing the works using this fund.