The COVID-19 pandemic is having an impact on the economy. Real estate is one of the sectors that have borne the effects of the blockade. The biggest aspect of concern about the industry was compliance with legal issues such as deadlines under the regulatory regime. The authorities have intervened and there have been a number of announcements regarding various regulatory compliance issues that are reducing deadline pressures.
The prime minister emphasized “independent India” and the finance minister announced five tranches of the stimulus package. In the first installment, the finance minister announced that the registration and completion dates for “suo moto” projects for all registered projects that expire on or after March 25 will be extended by six months without an individual application.
In addition, the Department of Housing and Urban Affairs recommended that the states / territories of the Union and their regulators treat COVID-19 as an “event of force majeure under RERA”, with the COVID-19 period increasing over six months as “God’s act” to consider is’. Regulators can add another three months if necessary and a new “project registration certificate” with revised deadlines can be issued.
To understand the importance of this announcement, consider that Indian real estate has changed with the implementation of the Real Estate Regulation and Development Act (RERA). The new paradigm brings two main aspects to Indian real estate: transparency and accountability. The standards provide for strict adherence to deadlines and adherence to deadlines in connection with legal conformities. In the event of default, there are provisions for imposing penalties on the property developer.
In recent years, there have been problems with last mile funding and liquidity crisis challenges that have caused some projects to stall and be delayed. The industry has had talks with the authorities through institutions like NAREDCO to meet the challenges, and there have been some positive moves. The bigger problem with RERA, however, concerns penalties for regulatory compliance. While these were being treated, COVID-19 resulted in the ban. Work was stopped abruptly on all construction sites throughout India.
In this scenario, it is difficult to meet the deadlines. Even after the block is lifted, it will take some time for activity in real estate to return to normal. In this situation, the regulatory aspect was worrying for the industry.
The COVID pandemic has brought all ongoing construction work to a standstill. The interruption in the supply chain will make the procurement of raw materials a challenge, and these problems are compounded by the return migration of local workers for fear and lack of work.
RERA brought transparency, compliance mechanism and financial discipline and effectively protected the interests of home buyers and developers. Severe penalties are imposed for late project execution. In view of the blocking, the project runtimes had to be extended by a few months in order to cope with the loss of time.
The announcement is effectively a great relief for real estate and is a positive step in the fight against COVID-19 disorder. The relaxation of the project duration within the framework of RERA brings relief to the developers and at the same time protects the interests of home buyers. The new schedules for your dream home services have been revised. This ensures home buyers’ confidence in the project and gives the developer fraternity a breather so that the backlog of work can be dealt with due to delays due to natural disasters.
(By Dr. Niranjan Hiranandani, National President of NAREDCO)
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