Union Government Extends Registration Of Real Estate Projects Under RERA Amid Covid-19 Woes
The Union government steps in to ease impact of Covid-19 pandemic and protect interests of home buyers.
The Union government has issued an advisory to automatically extend registration of all real estate projects registered under Real Estate Regulatory Authorities (RERA) by six months and further up to three months, if required, in view of the Covid-19 pandemic.
The advisory issued to all states, Union Territories and their Real Estate Regulatory Authorities is aimed at protecting the interests of home buyers, while ensuring ease of doing business in real estate sector.
The latest move would also ensure completion and delivery of flats/homes although with a delay of few months.
Following the announcement made by Finance Minister Nirmala Sitharaman,
Ministry of Housing and Urban Affairs issued an advisory to all states/UTs and their respective Real Estate Regulatory Authorities to consider the pandemic as ‘force majeure’. This would mean the pandemic must be considered as a natural calamity that is adversely affecting the regular development of real estate projects and extend registration of all real estate projects registered under RERA.
This measure will safeguard the interest of home buyers to ensure delivery of their flats/homes although with the delay of few months but it will definitely ensure the completion of the projects, the ministry said.
In the past, a lot of projects were stalled due to various reasons leaving lakhs of home buyers in a very difficult situation, where they were running from pillar to post for their booked homes.
Accordingly, in the prevailing circumstances, the primary objective is to address the concerns of home buyers by ensuring suitable regulatory relief to the developers for completion of projects so as to create a win-win situation for all the stakeholders.
The ministry had wide-ranging consultation with all stakeholders including home buyers, developers, financial institutions etc, and discussed all related issues threadbare to find the optimum solution for the situation created due to this pandemic.
Further, an urgent meeting of the Central Advisory Council (CAC) of RERA was held on 29 April 2020 under the chairmanship of Housing and Urban Affairs Minister Hardeep Singh Puri, wherein it was decided unanimously to recommend to issue the advisory by the central government to treat the current pandemic as force majeure under RERA.
Due to the situation created by the Covid-19 pandemic, a nationwide lockdown was announced from 25 March 2020. As a result, the construction work of ongoing real estate projects was halted leading to reverse migration of labourers to their native places.
Further, there was large-scale disruption in the supply chain of construction materials, which adversely impacted the construction activities across the country.
It is also anticipated that construction activities in pre-monsoon could not be undertaken, which will further delay the construction cycle. Moreover, due to the impending monsoon season followed by festivals like Dussehra, Diwali, Chatth etc, the labourers are not expected to come back soon.
It is clear that in such circumstances, work on the real estate projects will take quite some time to restart in full gear. In the absence of urgent remedial regulatory measures under Real Estate (Regulation and Development) Act, 2016, there is also a possibility of many real estate projects getting stalled leading to litigation.
This will ultimately result in non-delivery of flats to the home buyers, who have invested their lifetime savings for their dream homes.
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