6 month extension to builders to deliver projects-MahaRERA

6-month-extension-to-builders-to-deliver-projects-maharera

On Friday, the Maharashtra Real Estate Regulatory Authority (MahaRERA) gave builders a six-month relaxation to complete projects. Authority has accepted the demand to apply the force majeure clause due to the second wave. This is the second time during the pandemic that the authorities have provided such assistance to developers in the state.

“All projects registered by MahaRERA for which a completion date, revised completion date or extended completion date expire April 15, 2021 or later. The validity period for such projects is extended by six months, authority said in a notification.

Further authority said it would issue revised project registration certificates and revised timelines for such projects as soon as possible. It also made it clear that the renewal will not apply to projects that were to be completed by April 15th.

The notification said that on April 13, the state government issued instructions to restrict the movement of people due to another wave of infection, adding that the wave was more deadly. The lockdowns halted the construction activities due to labor shortages and impact on the movement of building materials. A six-month period of “force majeure” has been announced from April 15 to October 14.

Other authorities should also follow same process

The order was issued to help the government control the damage caused by COVID-19. Also to ensure that the implementation of the project is not affected.

The conditions or time limits for the implementation of projects that expire at any time during the force majeure period will be automatically extended till the expiration date. However the rights of allottees will not get affected through the order. The notification said that an association of promoters had presented themselves before the authority for help in view of another disruption ravaging the industry.

Developer Niranjan Hiranadani, National president of realty industry body Naredco, said, “This is a step in the right direction and the sector hopes that other authorities besides MahaRERA will follow the same thought process and provide the same relief.”

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two-year-delay-likely-in-delivery-of-flats-in-delhi-ncr

According to real estate associations Naredco and Credai, the completion time of apartments in different phases of construction in Delhi-NCR could be extended up to two years. The impact is primarily from two consecutive waves of the pandemic and the consequent disruptions in financing and employment.

It also prolongs the wait for the delayed apartments for a longer time. According to a recent survey by real estate consulting firm Anarock, there are more than 3 lakhs of such apartments in the major cities of Delhi-NCR. Apartments are considered delayed if they were launched in 2014 or earlier. Construction started after this period is in progress.

Delivery times for “ongoing” projects will also be affected. Completion time for more than 3 lakh apartments in the NCR may be affected by a two-year delay due to two waves of Covid-19. Real estate agencies Credai and Naredco say buyers and regulators should be ready to face at least a two-year delay. According to Anarock, around 50% of the delayed apartments are located in Greater Noida alone.

Relief package may help to boost construction

Real estate companies cited labor and supply chain problems during the pandemic as cause for the delay. The lack of cash flow also affected the construction work. This was reported by R.K. Arora, CMD of Supertech and President of Naredco, UP. “Since March 2020, project implementation has developed very slowly due to labor shortages, raw material shortages and related problems. Delivery time is delayed by approximately two years.”

Pankaj Bajaj, president of Credai (Delhi-NCR), said, Real estate is one of the worst hit sectors as a result most projects are likely to be delayed by about two years. We hope for relaxation to help us tackle this problem. In addition, to give construction a boost, the government should announce a relief package and provide last-mile funding through banks.

Additional six months registration validity

Prashant Thakur, head of research at Anarock said, According to a survey by Anarock, about 3.29 lakh flats launched in the NCR region in 2014 or earlier have now been stuck or delayed. The pandemic is one of the major reasons for the delay. All were to be delivered by June 2021. 50% of these units are in Greater Noida, Noida has about 16%, Gurgaon has about 12%, and Ghaziabad has about 10%. The remaining 12% are in Delhi, Faridabad and Bhiwadi.

UP-Rera member Balvinder Kumar said the solution was invented. Last year, we gave builders a six-month relaxation or waiver for registration restrictions when the pandemic broke out. According to current rules, all registrations can be valid for one year from the expiration date. We decided to extend the additional six months validity extension to registration of builders.

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NAREDCO urge builder to make isolation cabin for construction worker

On Thursday Naredco to developers of all real estate projects in the cities and Yamuna Expressway area have been asked to create isolation structures for Covid-affected workers at their construction sites.

The isolation departments on construction sites will be equipped with basic medical services, including beds, wheelchairs, oximeters, and disinfectants. Authorities in Noida, Greater Noida, and Yamuna Expressway have commissioned Naredco to help build these facilities so that these facilities can provide emergency assistance to workers affected by Covid before serious patients are transferred to hospitals.

Noida, Greater Noida, and Yamuna Expressway together account for over two lakh housing units in various construction stages. UP-Rera is already aware of this problem but has not yet offered builders any particular relief in terms of extending the deadline. Despite the fact that more than 25% of migrant workers left the area and went to their place of residence. According to an estimate these cities today still have a lakh people working at nearly 240 under-construction project sites.

RK Arora, president of Naredco-UP, said, the initiative was led by the authorities of the cities of Noida, Greater Noida, and Yamuna Expressway. We are promoting this initiative and have so far instructed builders. To create isolation structures for workers at 250 project sites in these three urban areas. The aim is to provide basic support to Covid affected workers before they are transported to the nearest hospital. However, according to builders, no serious outbreaks of Covid have yet been recorded at any construction site. However, builders said the ongoing pandemic will affect the construction time frame.

Pankaj Bajaj, Credai-NCR president said, there are no reports of any major Covid 19 leak anywhere yet. However, the reduction of the vacant workforce and the disruption of the supply chain during the lockdown period affected the work at the project sites and the end date. Projects are likely to be postponed.

Builders asking for support of RBI to deal with Covid second wave

Builders have urged the Reserve Bank of India (RBI) to consider a loan restructuring, a moratorium on interest payments, and extra liquidity support to the real estate sector. This comes after RBI Governor Shaktikanta Das announced on Wednesday a covid relief package for individuals, small businesses, and MSMEs.

The RBI Governor has mentioned a number of measures and arrangements in his statements. Such as the second round of loan restructuring and other relief measures as well as the term liquidity facility of about Rs 50,000 crore for healthcare and SLTRO for Small Finance Banks. The central bank also recognized the difficulties faced by individuals, small businesses, and small and medium-sized enterprises. Due to downsizing, and provided resolution 2.0 measures to restructure loans to small borrowers of up to Rs 25 crore.

CREDAI encouraged and hoped that similar measures would be announced in the coming days. To address the problems of large companies and labor-intensive sectors such as real estate.

It is hope that RBI consider real estate sector as well!

This was stated by the President of CREDAI Harsh Vardhan Patodia. We are convinced that the measures that make accounts classified as SMA 1 and SMA 2 also suitable for restructuring. An interest rate moratorium together with additional liquidity under ECLGS 3.0 transferred to real estate projects will help in reviving the economy and create jobs that are most important to compensate the influence of the second wave.

This was stated by the President of NAREDCO, Niranjan Hiranandani. The RBI governor announced a number of plans. Including the second round of loan restructuring and other relief measures, steps in the right direction. It is hoped that he will also look at industries as real estate that need similar support in these difficult times. We expect consistent, calibrated, and timely action across industries such as real estate.

Samantak Das, chief economist and head of Research & REIS, JLL India said. Apart from individual borrowers, this will be of great help to SMEs associated with the real estate sector, especially resource providers for this sector.

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NAREDCO demands industry status for housing segment.

National Real Estate Development Council has recently demanded infrastructure status for the housing segment. The Housing ministry expressed that infrastructure status can be given to the affordable housing segment.

Housing and Poverty Alleviation Ministry (MHUPA) gestured that this time special focus will be on affordable housing segment. Housing Ministry revealed that they are hopeful of bringing some changes in the affordable housing segment. Continue reading

Land Acquisition Bill Invites Hike in Residential Prices

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Real Estate Bill Have to Wait More

The much-awaited regulatory Bill for the real estate sector is still a long way off. The draft Real Estate Regulation Bill will not be tabled during the current session of Parliament, a senior official in the Ministry of Housing and Urban Poverty Alleviation has confirmed.

The imprisonment, according to the final draft, applies only in the case of non-registration with the real estate regulation authority. Registration is mandatory for projects of a certain area and type. The maximum term of imprisonment is up to three years, and penalty may be extended up to 10 per cent of the project cost. In the earlier draft of the Bill, imprisonment was recommended in case of wilful failure to comply with orders of Appellate Tribunal too. The ministry has also reduced the area size for compulsory registration from 4,000 square feet in the earlier draft to 1,000 square feet now. This would mean registration would be mandatory for the smaller players too.

The Bill has been in the making for several years now, and was slated to be introduced during the Budget session. The housing ministry is now targeting the monsoon session of Parliament. The official said the final draft was ready. The draft bill has gone through some changes related to clauses on imprisonment and compulsory registration.

National Real Estate Development Council (Naredco) hailed this as a good move. “It would also check fly-by-night operators in real estate, which are majorly into smaller projects,” said R. R Singh, Naredco director-general. “However, the load on the authority will increase, as it would get flooded with projects for registration as smaller projects are more in number.” Confederation of Real Estate Developers Association of India (Credai), however, wants no limit on the registration. “No developer should be left out of the ambit of Real Estate Regulation Authority,” according to Credai chairman Lalit Jain.

The objective of the proposed legislation is to establish an authority to regulate, control and promote planned and healthy development and construction, sale, transfer and management of colonies, residential buildings, apartments and other similar properties, besides to host and maintain a website containing all project details.