After being sent to the state government of Uttar Pradesh by the three development authorities in Gautam Budha Nagar, the project settlement policy got approved on December 13. Post-approval, the realtors will be called for the meeting by the Noida and Greater Noida authorities to resolve the problems in the realty sector.
This policy was bought into consideration when a slowdown was cited in the realty sector because the builders were not able to complete their projects. The chairperson of Noida Authority, Rama Raman has earlier said that after the arrival of state government’s approval for this policy, the developers will have to open an escrow account. This account will be opened for each project and for every builder. Also, it will be applicable for all the three authorities of Gautam Budha Nagar district. The account has to be made operational jointly by the builder and the buyer’s representative of the project.
This policy will majorly work on following four scenarios-
- The project can be canceled by a realtor, if the construction hasn’t started on the allotted land or the third party rights haven’t been created. In this scenario, the land can be surrendered to the authority by the realtor but will have to pay a penalty of 30% of the total amount paid to the Authority but if the third party rights are created then the remaining 70% will be returned to buyers. Further, it should be noted here that the returned amount to the buyer will be the initial amount, without interest. But if the builder and buyer have an agreement on the interest amount then the same has to be borne by the builder.
- The realtor will get a rescheduled payment policy for the dues against the cost of land for the project which is completed but hasn’t procured a completion certificate. For this policy, the time limit will be decided by the government of UP. If the buyer has not able to register the property then the builder will have to deposit 10% of the amount due which is currently 25%.
- In this second last scenario, the authority will take the unused land and will allow the builder to take hold of that portion only where the project is launched. The developer will have to pay 15 percent as the penalty of the amount deposited with the Authority and the realtor will get the land which will be proportionate to the remaining amount.
- The last scenario stands for the case when a developer needs a partner for the completion of the project. This refers to that when a builder has leftover floor area ratio (FAR) in its projects then they are allowed to sell it to their co-developers, who will finish the left project. All the proceedings from the sales will be deposited in the escrow account which will further be used to pay off home buyers.
All these scenarios and other things, if any, will be educated to the builders at the meeting which will be held at the authority’s Sector 6 office. Noida has nearly investments from one lakh buyers who are stuck in 50 delayed projects. In Greater Noida, there are 95 under construction realty projects and nearly one lakh home buyers are expected to be affected in 80 of these projects. For the Yamuna Expressway authority area, 20 realtors have unfinished projects which have investments of 20,000 home buyers. With respect to land dues, around Rs. 25,000 crores have to be recovered from builders by the Noida, Greater Noida and Yamuna Expressway authorities. The main goal of the officials for the meeting is to get an estimate of the returned land which will be resold by them at the current rate in order to recover the dues. The chief executive officer of the Noida and Greater Noida authorities, Deepak Agarwal said that they will find out how many builders will use this policy to return undeveloped land and thus, will make a list of such builders. Further, it will be calculated for the land which they will get back and see how this will have a financial impact on the buyers and builders.