In a major relief for the real estate developers, the Union Ministry for Housing and Urban Affairs will issue advisory to states and union territories to declare the Covid-19 situation as a 'force majeure' under the Real Estate (Regulation and Development) Act.
Addressing the media here on Wednesday, Finance Minister Nirmala Sitharaman said that the Ministry for Housing and Urban Affairs would issue advisory to the states and union territories to the effect in a bid to provide relief to developers.
With the move, the government has allowed suo-moto extension of the registration and completion date by six months for all registered project expiring on or after March 25, 2020 without individual applications.
She said that regulatory authorities may extend this for another period of upto three months, if needed.
Further, the fresh project registration certificates will be issued automatically with revised timelines. The Centre has also directed the extension of timelines for various statutory compliances under RERA concurrently.
Dr. Niranjan Hiranandani, National President - NAREDCO while commenting on this said that the announcement related to the regulatory aspect of extension of dates under RERA by allowing ‘force majeure’ with the Urban Development Ministry issuing advisories to states and UTs to treat the COVID-19 period as an 'Act of God'
"In terms of actual implementation, fresh project registration certificates can be issued as also, registration and completion dates extended ‘suo moto’ for up to six months. This is indeed a move to combat COVID disruption which practically brought construction work to a grinding halt with additional chaos of migrant labourer’s movement and raw material supply disruption," Hiranandani added.
Hiranandani believes that the relaxation in project timelines under RERA Act will bring in a sigh of relief to the developers and safeguard the interest of homebuyers with the revised new timelines for their dream home deliverables. "This ensures homebuyers trust in the project and grants breather to the developer’s fraternity for coping up with backlogged work due to natural disaster delays," he said.
Hiranandani further added that the real estate industry is pegging a big hope on much-awaited fiscal relief to be granted to the second-largest employment generating sector. Liquidity infusion will be imperative to turn around the depressing scenario of the sector, he opines.
He believes that the move will be turn out to be positive especially for the stressed players in the industry. "The other announcement which is positive for real estate is the announcement of INR 30,000 crore special liquidity scheme for Non-Banking Finance Companies (NBFCs) and Home Finance Companies (HFCs) and Micro Finance Institutions (MFIs). NBFCs and HFCs are major sources of credit for real estate, the impact should be easing of the liquidity crisis, especially for stressed players," he said.
