The major challenges in the insolvency resolution of real estate companies arise from the peculiarities of this sector, especially since the divergent interests of the allottees of the real estate projects do not align with the scheme of the CIRP.
The parliament in order to regulate this one of the fastest-growing sectors passed “The Real Estate (Regulation and Development) Act, 20164 which came into effect on 1st May 2016.
Some of the legal remedies available for the homebuyers of stalled real estate projects against builders in case of disputes or grievances. Homebuyers can protect themselves from builders in India and ensure that they get their dream home without any hassles.
Karnataka Real Estate Regulatory Authority (hereinafter referred to as K-RERA or authority) has given a deadline extension for the projects that were supposed to be completed in April or later to September 2021.
SWAMIH Investment Fund I Scheme is a real saver for builders and developers. The fund provides aid to the builders who falls under the category and intends to complete the stalled projects on time.
Section 18(1) of the RERA Act provides for ‘Return of amount and compensation’ which is the base for complaint under section 31 seeking refund, interest and compensation.
Different forums provide for different reliefs and one must be cautious enough before choosing an appropriate forum. Before choosing the appropriate forum, points to be analyzed are type of violation by the builder, what relief is prayed for, urgency, repetitive nature, financial condition of the builder, status of other projects, etc.
Since the real estate projects are the turkey projects and take multiple years to get it completed, a normal delay can be accepted. Any delay of more than 1 year from promised date of possession is regarded as ‘extra-ordinary delay’.
The developer requires huge investments for the development of the project for which he approaches banks for financial help and a buyer approach bank to fulfilling his dream to own a house. This is how builder, buyer and the bank get connected in real estate business.
whereas legislation like RERA provides for individual remedies against the Builder, the IBC Code gives collective control over the affairs and management of the Corporate Debtor to its financial creditors.
Homebuyers may have delayed projects completed under the aegis of the AoA, under the model formulated under Section 8 of RERA. Joint proposal of ASGI Properties Pvt Ltd and ASG Apple 7 Buyers Association, authorised the developer to complete the stalled project.
UP-RERA has expressed contentions to issue a show-cause notice to Supertech Realtors under Section 5 (1) of the RERA Act, 2016 to describe why the application for registration should not be refused.
UP-RERA has taken this step to ensure that homebuyers’ interests are effectively protected and that the RERA Act’s provisions are followed.
All the promoters of the real estate projects registered with UP-RERA and similarly all the real estate agents registered with UP-RERA shall ensure strict compliance of these guidelines.
Under Section 11 of the Act all the projects in the state are required to compulsorily register under RERA and this number is to be shown in every “advertisement” by the promoter.
join For Updates