Noida plans to persuade builders to pay, gets few takers to start registration, Real Estate News, ET Real Estate

Noida: Two schemes available for realtors to stop payment of their old dues have received a lukewarm response, neither Noida Authority Nor are builders any closer to a solution to the impasse, which has squeezed a vital revenue channel for the government, suspended registries for thousands of homebuyers and raised the risk of bankruptcy to builders.

Last December, the Noida Authority released a rescheduling policy that builders could avail from January 1 to March 31. The policy allowed realtors to restructure the payment of their total dues by paying 20% ​​upfront and agreeing to pay the installments within two. window of the year. With this, the developers will also be able to register flats equal to the amount paid.

But so far, only six realtors have shown interest in rescheduling dues and only two have gone on to apply. Last year, the Noida Authority had issued notices to 56 builders for dues of Rs 9,000 crore. Only about Rs 350 crore could be recovered.

Collectively, Noida and Greater Noida The development authorities have dues of around Rs 40,000 crore, which they have not been able to recover.

Another scheme, much older, to pay builders their dues, is the flat-wise registry scheme that was approved by the Noida Authority Board in 2019. It allowed a builder to get flat-wise occupancy certificate by paying proportionate dues instead of waiting. To complete the entire project, thus enabling registries. Officials explained that the price per flat is calculated by adding 10% to the total liability of a builder.

Only 19 developers have filed application for flat-wise registry and only one-third (6) of them have deposited money, allowing registry of 180 flats.

Additional CEO of Noida Authority Prabhash Kumar Said, “We are calling developers at Noida Authority and appealing them to take advantage of ongoing schemes. Later, drastic measures will be taken like sealing unsold inventory, offices and vacant land of projects. End In, recovery certificates will be issued.” ,

Kumar said that Noida will upload all the details of projects and dues of developers on its official website within a few days. “When did the builder take the land on lease from the authority, whether his layout plan is approved or not, how much is due, how many flats have been built, how many flats are yet to be built, how many have been registered and how many are yet to be registered will be available in the public domain,” he said.
There are 116 ongoing projects in Noida. If the developers clear the dues, around 8,000 flats can be registered. This does not include projects by Amrapali, Unitech and Jaypee Infratech, which are either in the National Company Law Tribunal or the Supreme Court, and constitute a bulk of unfinished flats.

Noida and Greater Noida authorities served notices to builders to recover their dues after the Supreme Court on November 7 last year quashed an earlier order to cap interest rates for builders at 8% . The realtors again moved the court for review, but on February 28, the court dismissed the petitions.

For real estate companies who have seen their debt snowball due to high interest rates (15-23%) and penalties for defaulting on payment schedules and were hoping to reduce the outstanding burden through the 8% calculation , The order was a big blow. His immediate reaction to the latest court order was that more companies would end up in NCLT for insolvency proceedings. Builders have been asking the UP government to recalculate the dues, arguing that what it is today is the interest component, and the one-time settlement window.

Meanwhile, homebuyers can argue that they got the rawest deal. They cannot sign papers that officially make them owners of flats for which they have paid in full and waited years to get possession. It is not their fault.