Status as on- 27/10/2021  

UP RERA has passed an Office Order dated 18.08.2021 considering grant of additional extension of registration of eligible projects on representation dated 27.05.2021 & 08.05.2021 submitted by CREDAI (The Confederation of Real Estate Developers Associations of India) and NAREDCO (National Real Estate Development Council) respectively. The representations were considered by the Authority in its 66^th meeting conducted on 27.07.2021 and passed a reasoned order dated 18.08.2021 after consideration.

Submissions made by the confederations are:

• Due to pandemic and consequent lockdown, it is impossible to reach the pace of development which was prior to pandemic. Supply of raw materials is also disturbed and it will take another 10-12 months to normalize supply of over-seas sources.
• Revenue collection from allottees has been seriously strained and new sales are also not expected for at least 2 years. Cancellation of bookings by the allottees is also a big concern of the real estate sector.
• Supply of finance into the real estate is also adversely affected. Bank and other financial institutions are reluctant to finance the real estate projects due to risk factors.
• Government offices responsible for granting approvals and clearances are closed, etc.

Reliefs sought by the confederations are:

• Declaring period of 21 months (01^st March 2020 to 31^st December 2021) as period of force majeure which means no liabilities, responsibilities and penalties against the builder for that period and completion dates of the projects ending on 01^st March 2020 be automatically extended by 1 year and 9 months to December 2021 without payment of any fees.
• Complete waiver of refund/interest/penalties/compensation pertaining to the extended period of projects and no benefits of clause 7 of the Agreement for Sale be provided to the buyers, etc.
• No allottee should be allowed to withdraw from the project without the fault of the promoter.
• The requirement for consent of 2/3^rd of the allottees of the projector for an alteration in the project may be reduced to a lower level.
• Requirement of payment within 45 days of the order of the RERA Authority be deferred to the extended period of 31^st December 2021, etc.

Authority while considering the representations made some observations in the order:

• The Authority, on the basis of the advisory issued by the government of India, decided to extend by six months the completion date of all the projects using its powers under Section 6 of the RERA Act and Rule 7 of the Rules.
• During the year 2019, there has been a dislocation of about three months in construction activities in the Delhi NCR due to orders of the Hon’ble Supreme Court, the NGT and the EPCA.
• As per the provisions of Section 6 of the Act, the Authority is empowered to grant extension of registration on the grounds of force majeure on the application of the promoter.
• However, granting such extension to all the promoters in case of all the projects in case of all the projects, irrespective of the intent and the capacity of the promoter to complete such a project, or irrespective of the desired purpose and the waiving of the extension fee in all the instances, whether the extension has been sought solely on the force majeure grounds, or it has been clubbed with normal extension of registration, may also not be in conformity with the letter and spirit of the rule.
• Authority feels that it would be appropriate to send a reference to the government under Section 32 of the Act for extension of the validity of the plans/maps without charging any fee.
• However, the Authority is of the view that it should not grant such requests of the CREDAI and NAREDCO which may compromise the lawful claims and interests of the allottees or which may result in diluting the provisions of the Act or the Rules.

Authority passed the following orders:

• The registration of the projects may be extended by one year as per the provisions of the first proviso of Section 6 of the Act. The Authority may also grant extension upto 15 months in NCR region and 12 months in region outside NCR, which includes 6 months extension already granted on ground of Covid-19 (Force Majeure).
• Such relaxation shall be granted in case of projects whose registration, original or extended, is ending or has ended on a date not later than 31.12.2021 if the Authority is satisfied.
• If any promoter is seeking extension of more than 2 years and 3 months in the NCR region or 2 years in region outside the NCR (which includes 1 year of extension for reasons of default and 15/12 months on the basis of the force majeure), it shall be required to come with a written agreement with the Association of Allottees (AOA) for appropriate decision at the end of the Authority under section 6 read with section 7 and 8 of the Act. This additional extension shall be without any prejudice to lawful rights and claims of the allottees.
• If it is discovered at any stage that the promoter has obtained the extension of the registration by misrepresenting the facts, the certificate of extension shall be cancelled and proceedings to impose penalty under Section 63 of the Act will be initiated.

The decision has been taken in view to remove the constraints and facilitate the development of the stuck and slowed down real estate projects, so that the allottees of such projects can get the delivery of their houses within reasonable period of time.

Disclaimer-  The above article is based on the personal interpretation of the related orders and laws. The readers are expected to take expert opinion before relying upon the article. For more information, please contact us at rera@centrik.in

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