Finance minister Nirmala Sitharaman said on May 13 that the housing and urban affairs ministry will issue advisory to states and union territories to treat COVID-19 as force majeure. The announcement comes as a relief to stakeholders as well as the buyers of the real estate segment as it has cleared the air over the widespread confusion over the fate of under-construction properties.
The advisory mentions that states/UTs and their regulatory authorities will extend the registration and completion data suo moto by six months for all registered projects expiring on or after March 25, 2020, without individual applications. Since the inception of lockdown, construction activity has come to a screeching halt due to which projects were at the risk of defaulting on RERA timelines.
“To safeguard the interest of all stakeholders including homebuyers, CAC after detailed deliberations made unanimous recommendation to invoke the ‘force majeure’ clause by Real Estate Regulatory Authorities to extend the registration of projects registered under RERA,” the advisory said.
The regulators, the ministry said, could extend by another three months the date of completion, if needed. They can also issue fresh “project registration certificates” with a revised timeline at the earliest.
Due to nationwide lockdown, reverse migration of labourers & disruption in the supply of construction materials, projects were halted in India and will take quite some time to revive in full swing. This extension will provide relief from unnecessary litigations and stress on projects as well as on the buyers.
In line with the Government’s focus on Ease of Doing Business (EoDB), RERAs have been advised to issue ‘Revised Registration Certificates’ with new timelines ‘suo moto’ without taking individual applications. Further all compliance timelines will be extended concurrently.
This measure will safeguard interest of homebuyers by ensuring delivery of their homes with delay of a few months, as mandated under RERA.
“GoI is fully committed to uphold & protect the interest of homebuyers & ensure EoDB in the real estate sector. #AtmaNirbharBharat,” tweeted Durga Shankar Mishra, Secretary, Ministry of Urban and Housing Affairs.
Apart from RERA relaxation, the government has launched a Rs 30,000 crore special liquidity scheme for the segment. Under the scheme investment will be made in both primary and secondary market transactions in investment grade debt papers of NBFCs/HFCs and MFIs.
The government has launched a Rs 30,000 crore special liquidity scheme. Under the scheme investment will be made in both primary and secondary market transactions in investment grade debt paper of NBFCs/HFCs and MFIs.
Here is more on coronavirus affect on real estate segment.