New scheme for builders to deliver projects on time
NOIDA: The Noida authority on Tuesday came up with a new scheme under which a defaulter builder will have to pay 10-15% of the total land dues to become eligible for getting occupancy certificate (OC) for a housing project.
The move, proposed by Noida authority chief executive officer Alok Tandon, is expected to benefit 78,000 homebuyers, who are unable to shift into their ready flats as the defaulter builders are unable to get occupancy certificates. There are 94 stuck housing projects in Noida. If the new scheme works out, flat buyers will be able to shift into their flats and also get registry of their homes done.
If a builder has more than ₹500 crore land dues, he will have to deposit 10% of the total default amount. And if the default is less than ₹500 crore, the builder can deposit 15% of the total outstanding. After a builder deposits 10 or 15% of the default amount, depending upon his dues, the authority will issue no dues certificate (NDC), making him eligible for getting occupancy certificate for a housing project,” said Manmohan Mishra, financial controller of the Noida authority.
It is mandatory for a builder to obtain NDC to be eligible for OC. Without OC, a builder cannot offer possession and execute registry of their flats. Most of the housing projects are behind schedule for three to seven years. Builders cite fund crunch as a reason why they failed to finish and deliver projects. They said due to slowdown in the realty sector they failed to sell their flats and make profit.
On August 24, the Noida Authority had relaxed the terms for issuing occupancy certificates to select stuck housing projects that fulfil certain conditions. According to the police, the builder was supposed to deposit 10% of the total land dues and get registry of flats executed by paying the remaining dues flat wise. But the fault with the scheme was that the authority was issuing OC only for half of the housing project. For example, a project which had 10 towers ready, the Noida authority would give OC for only five towers (half of the housing project). But the builder was finding it difficult to choose which half to opt for getting the OC as the allottees were also fighting amongst themselves that they should be given preference in delivering possession.
“Unlike the August 24 policy, we will issue OC for complete project under the new policy. Therefore, we hope the new policy will work and benefit homebuyers,” said Mishra.
Under the new policy, a builder will clear the remaining land dues at the time of registry of a flat.
“After depositing 10% of total default, the builder will pay the remaining land dues on pro rata basis at the time of execution of flat registry,” said Mishra.
No builder had applied to obtain OC under August 24 policy till date. The authority had to come up with this new policy because UP CM Yogi Adityanath has directed Noida, Greater Noida and Yamuna authorities to deliver 50,000 flats in three months’ time.
The authority’s project settlement policy, which was brought in December 2016 to address the issues faced by the realty sector ended on June 15 this year.
“The UP government is yet to extend time of PSP under which the builders could have rescheduled their land dues. But we do not know when PSP time will be extended. Therefore we have come up with this new policy, which will be available for two months,” said Mishra.