17,500 Flats Undelivered, Panel Of UP Ministers Orders 8 Noida Builders To Be Arrested

On Tuesday, a three-member panel of UP ministers directed SSP of Gautam Budh Nagar to arrest eight builders. Earlier, in September, police had lodged 13 FIRs against Amrapali, Supertech, Alpine Realtech, Proview group, Today Homes, and JNC Constructions. The builders were booked under Sections 406 (criminal breach of trust) and 420 (cheating) of the Indian Penal Code.

This panel was set up by UP CM Adityanath in August and comprises UP housing minister Suresh Kumar Khanna and state ministers Satish Mahana and Suresh Rana in a bid to push the builders in Noida, Greater Noida and Yamuna Expressway region to deliver 50,000 flats by the end of December 2017.

As reported, officials said the three development authorities have a roadmap to deliver 32,500 flats by the end of the year. The committee has now asked how to give out the remaining 17,500 units.

The Problem is Not New

In the region, 1.8 lakh residential units of nearly 102 group housing projects are stuck for more than a year now. In the month of July 2017, Talking to ET, the additional CEO of Greater Noida Industrial Development Authority(GNIDA) elaborates thus, “of the 102 projects, 49 comprising approximately 50,000 units are those where builders have not only defaulted on payments to GNIDA but also on the delivery of flats to buyers. Here the buyers are complaining that they have not been able to register their flats and the apartments are not even liveable. The balance 53 projects have nearly one lakh residential units. Here the work is at a standstill even though they have been launched. We still have to examine whether the builder has run away with the buyers’ money, whether there is unsold property or whether the builder has used buyers’ money to invest in other projects. In these projects, buyers have been asking for refunds from the builder.”

Why can’t UP-Real Estate Regulatory Act come to the rescue?

The buyers are struggling with the dual sword of rent and EMI. For exactly this kind of scenario, RERA was enacted in 2016 as a framework to protect the home buyers pan-India. As “land” is part of State List, every state has to adopt its RERA. However, by the end of July deadline, out of 29 states, only 15 states had notified the final rules of the real estate regulatory act. UP government did pass the act and complaints, grievances, and information regarding registered projects, promoters and agents can be found on the UP-Rera website.
The problem is that most of the contentious 102 housing projects mentioned above may not be under the purview of the RERA as per section ‘h’ of the act (pdf) which deals with “ongoing projects.”

The Protests by Home Buyers

The distressed home buyers are challenging this ‘section h’ of RERA and overall apathy of the builder lobby by staging protests and threatening gherao of CM residence in Lucknow in the month of July. Rashesh Purohit, founder, NCR home buyers association, told ET that, “since the spirit of the notification is not in consonance with the actual Act passed by the Parliament in March 2016, we will challenge the notification through a writ petition at Allahabad high court.”
In this video, posted in May by ‘cityspidey’, Mr Purohit answers questions about the distress of home buyers and the promise made by UP government to take swift action if talks with builders fail.

Response of Builder Lobby

Under pressure from buyers, development authorities and now from the state government, Pankaj Bajaj, president, Confederation of Real Estate Developers Association (Credai) -NCR, said, “… unless there is a way to help these builders secure enough funds, completion and handovers will be delayed. All those builders who sold their apartments are extremely low rates are now finding it difficult to complete their projects.”