Centre extends timeline for RERA projects completions by six months
Union Finance Minister Nirmala Sitharaman on Wednesday said that the deadline for completion of RERA projects will be extended by up to six months. Announcing the part of the economic relief package of Rs. 20 lacs crore as announced by the PM Narender Modi to rebuild and provide much-needed support to the nation amidst the adverse impact caused due to the outbreak of pandemic Coronavirus.
Due to the adverse impact of the COVID-19 pandemic and the nationwide lockdown to check the spread of coronavirus from March 25, 2020, real estate projects stand the risk of defaulting on RERA timelines. Timelines need to be extended, said FM Nirmala Sitharaman.
She announced the decision to provide relief to real estate developers to ensure that homebuyers get their homes with new timelines. She said that the Union Housing and Urban Affairs Ministry will issue advisory to states and union territories and their regulatory authorities to treat the COVID-19 pandemic outbreak as an event of ‘force majeure’ or an ‘act of God’ under the real estate law RERA.
This relief will be given to all the registered projects under the Real Estate (Regulation and Development) Act (RERA) expiring on or after March 25. The regulators can extend the registration and completion date suo motto by six months for all RERA registered projects without individual applications. The regulatory authorities may give a further extension of three months if needed, she said. The finance minister also said that fresh project registration certificates should be issued automatically with revised timelines. They can also extend timelines for various statuary compliances under RERA concurrently.
There has been a large-scale disruption in the supply chain of construction material, which adversely impacted construction activities across the country. As a result, the construction work of ongoing real estate projects was halted leading to reverse migration of labourers to their native places.
Therefore, the lock-down has deepened the crisis and has stalled the construction of so many projects. The residential sector was already reeling from a prolonged slowdown, but now putting a stop on home sales and creating cash flow crisis for developers.
It is clear that in such circumstances, work on the real estate projects will take quite some time to restart in full gear. Since construction activity had been halted all across the country most projects likely to be delayed by at least four to six months. This will ultimately result in non-delivery of homes to the homebuyers who have invested their lifetime savings in their dream homes.
Therefore, under the prevailing circumstances, the objective of the government has been to address the concerns of homebuyers by ensuring a suitable regulatory relief to the developers for the completion of projects. So, this is a big measure that will de-stress real estate developers significantly and ensure the completion of projects. The measure will safeguard the interest of homebuyers, who will get the delivery of their booked homes with revised timelines.
This measure is expected to provide much-needed relief to distress real estate developers significantly since construction activity had been halted across the country. Therefore, it is expected to provide relief to builders in the completion of projects, especially in a situation when they are facing supply-chain disruption and shortage of labour. It will also ensure completion of projects so that homebuyers are able to get delivery of their booked homes with new timelines,” she added.
The relief measures announced by the finance minister for India’s real estate sector will benefit homebuyers, builders and other stakeholders and help them to counter the adverse effect of the pandemic crisis in the housing sector.