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.