Homebuyers’ lobby seeks RERA listing relaxation for stress fund support – The Economic Times

The body has also suggested engaging homebuyers in monitoring of the fund usage and completion of the project as against mere disbursement of money to builders and contractors through an escrow account.
National lobby of homebuyers, the Forum for People’s Collective Efforts (FPCE), has approached Prime Minister Narendra Modi seeking relaxation of the condition of RERA registration for selection of stuck housingNSE 0.40 % projects that can avail financing support from the government’s Rs 25,000-crore stress fund.

According to FPCE, the condition will keep homebuyers of all stuck projects in states such as Telangana and West Bengal completely out of the ambit of the fund, while certain such projects in Haryana, Punjab, Uttar Pradesh, Maharashtra, Karnataka, Madhya Pradesh and Tamil Nadu will also not be able to get any benefit as the rules there have been diluted and that has kept certain ongoing projects also out of the ambit of RERA.

The authorities of Himachal Pradesh and Kerala have been formed recently and therefore not many projects have yet been registered under them. In its letter to the Prime Minister, FPCE has pointed out that West Bengal government has not implemented RERA, but has enacted its own law — West Bengal Housing Industry Regulation Act, 2017 (WBHIRA). The homebuyers’ body has already challenged the constitutional validity of WBHIRA before the Supreme Court. ET has reviewed the copy of this letter sent to the Prime Minister.

“Homebuyers of delayed projects in all the aforementioned states cannot be punished for no fault of theirs. They are equally or in many cases, more sufferers of delay. This special window has not been created under RERA nor will the disbursal be done under the provisions of RERA. Hence, selection criteria needs to be altered to include all ongoing projects launched prior to the RERA,” Abhay Upadhyay, president, FPCE, told ET.

The pan-India homebuyers’ body has been pushing for creation of a stress fund for completion of stuck projects since the beginning of this year.

The body has also suggested engaging homebuyers in monitoring of the fund usage and completion of the project as against mere disbursement of money to builders and contractors through an escrow account.

“Considering the track records of builders who are responsible for the NPAs of banks to the tune of Rs 90,000 crores, they should be kept at arm’s-length and no funds should be disbursed directly to them. This is also necessary because we still do not have any such mechanism to track either diversion of funds or its misuse,” the FPCE letter said.

It has appealed to the government to form a task force under the housing ministry consisting of representatives of homebuyers, ministry officials, state governments officials, financial institutions, industry experts other than builders to identify projects nearing completion that should be taken first for completion, to monitor end use of funds disbursed and the progress of construction of such projects.

The said task force, according to FPCE, should identify a public-sector enterprise which may be assigned the job to complete such identified projects under its supervision. The task force should prepare timelines for completion of all such delayed projects and should also assign due priority according to the status of completion of each project.

Depending on the magnitude, multiple task forces may be constituted representing each zone. Also committee of homebuyers of respective projects should be formed to keep a close watch on the progress of projects and receive feedback of any wrong doing, it suggested.

The homebuyers’ body has also recommended that it needs to be ensured that no builder is part of such task force as the entire exercise will be primarily against their misdeeds and hence they may use their influence to derail the whole process to get favour for their own projects.

via Homebuyers’ lobby seeks RERA listing relaxation for stress fund support – The Economic Times

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