Sunday, July 14, 2024

Uttar Pradesh Rehabilitation Package for Builders Receives Lukewarm Response on Dues Settlement

The rehabilitation package introduced by the Uttar Pradesh government for real estate developers has garnered a lukewarm response a month and a half after its launch. Out of the 57 realtors eligible for the package, only 13 have submitted consent letters to the Noida Authority, agreeing to the terms. Notably, some major companies, including Aims Max Gardenia, Omaxe, and Pan Realtors, have neither attended meetings nor applied for the rescheduling of their dues.

The rehabilitation package, aligned with the recommendations of the Amitabh Kant committee, aims to revive 2.4 lakh stalled projects, primarily concentrated in Noida and Greater Noida. It includes a two-year ‘zero period’ waiver of penalties and interests during the Covid pandemic, resulting in reduced dues for developers. However, it also introduces a time-bound repayment schedule for the recalculated dues.

Noida Authority will soon issue “final” letters to developers seeking their decision on the package. If all 57 developers accept the terms, approximately 32,000 homebuyers awaiting registry or possession will benefit, leading to a repayment pipeline of Rs 8,000 crore for Noida.

Noida CEO Lokesh M emphasized the need for prompt decisions from developers to benefit from rebates and stated that final letters would be issued to them soon. For those who do not apply for the package, there will be no recalculation of dues with the zero-period waiver. Such developers will be subject to government rules and regulations, necessitating full payment of dues, with potential actions such as issuing recovery certificates and sealing properties.

The government’s guidelines to revive stalled projects were issued on December 21, incorporating the Kant panel’s suggestions. The Noida Authority recalculated dues, assuring most realtors of a 21% rebate. While some developers have applied for the package, discontent remains regarding the recalculation of dues, particularly related to the National Green Tribunal’s zero period. Credai (western UP) secretary Dinesh Gupta highlighted concerns about the upfront payment requirement and the consideration of the NGT zero period on a case-by-case basis, describing it as a significant challenge.

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