RERA Grants Extension Of 6-9 Months In 23 States Invoking Force Majeure

Under constrcuction site
Under constrcuction site

Real estate regulation authority, RERA, in close to some 23 states have extended the deadline of the registered projects by six months in view of the ongoing COVID-19 pandemic situation.  The declaration came from Secretary, Ministry of Housing and Urban Affairs, Durga Shankar Mishra, who in a series of tweets claimed that the extension is granted to safeguard the best interest of the home buyers. 

The declaration seems to come as a reply to allegations being raised on social media in reference to extension given to real estate developers through the Ministry’s Advisory to States/RERA to complete the projects. 

Further in a series of tweets, Mishra said that due to COVID-19, works of ongoing real estate projects have halted. Large scale reverse migration of labour and huge disruption in supply chain of materials have adversely impacted construction works. Labour is least likely to return before festivals in October- November get over.

The Secretary also said that real estate projects will take quite some time to resume work fully. Surely this will delay completion leading to a lot of litigation for non-compliance of commitments on time and make projects fail/ get stressed, added Mishra.

Hence, in order to safeguard the interest of all stakeholders especially home buyers & to ensure delivery of houses/flats to them, the Ministry has advised States/ RERA to invoke the ‘force majeure’ clause under the law. He further disclosed that so far 23 States’ RERA have extended registration of projects by 6 months and one by 9 months in view of the situation created by COVID-19. As advised by the Ministry, this has been done ‘suo moto’ to cut down unnecessary paperwork and delay.

Mishra also tweeted that RBI has recently allowed moratorium of 6 months till 31 August, 2020 to homebuyers for payment of dues in view of COVID-19. Hence, borrowers get effectively 9 months to put their accounts in order without getting NPA. He further added these measures have been taken to ensure that projects do not get stalled due to disruptions caused by COVID-19 pandemic & flats/ homes get delivered to the homebuyers albeit with some delay.

The MoHUA Secretary ended the Twitter thread by reiterating that homebuyers with lifetime savings invested in dream home projects are interested in flats/homes & not litigations or making developers fail.
Although RBI has recently allowed a moratorium of 6 months till 31 August, 2020, to homebuyers for payment of dues in view of Covid-19, the buyers are demanding the complete waive off of interest for 6-9 months.

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