UPRERA order draws flak from upset home buyers

LUCKNOW: UP Real Estate Regulatory Authority’s (UPRERA) order laying down criteria for payment of interest by a developer on allottees’ money in case of default has drawn flak from home buyers, who have termed it to be in favour of realtors.

“We are already upset with the state government for diluting the RERA Act in UP. As if this was not enough, this latest missive from the acting chairman of the regulatory authority comes as yet another move that favours builders and overlooks the interest of home buyers,” says Alok Singh, who has started an online petition against the controversial June 19 UPRERA order.

More than 5,500 people and home buyers have already signed the petition.

The home buyers, who have formed an association, have decided to challenge the alleged dilutions in UPRERA Act and the latest missive of the chairman before the Supreme Court.

In the absence of a fixed interest rate to be paid on a refund sought by an allottee on his deposit by a developer, who has failed to make timely delivery of his flat, vice chairmen of development authorities had been passing varying orders with interest on deposit ranging from 9 to 24 percent. The inconsistency in these orders was brought to the notice of officiating UPRERA chairman Nitin Ramesh Gokarn by vice chairperson of Ghaziabad Development Authority, following which the latter issued guidelines

› The latest missive from the acting chairman of the regulatory authority comes as yet another move that favours builders and overlooks the interest of home buyers ALOK SINGH, activist

asking the presiding officers to follow the interest slab on home loans by SBI.

Known as Marginal Cost of Fund Lending Rate (MCLR), the prevailing slab by SBI on such loans is 8.25 per cent and the authorities were asked to follow this slab where no interest was defined in the builder-buyer agreement and not to exceed their brief and award any other monetary compensation to home buyers. Gokarn was not available for comment.

“As per the thumb rule laid down in new guidelines, 9 per cent interest is applicable on those home buyer- developer agreements where there is no penalty clause. Majority of realtors do have a penalty clause for delay in project delivery, which is fixed at 3 per cent per annum or ₹5 per square feet per month,” informs Singh.

“This, in other words means that if a buyer has agreed for no compensation in agreement at the time of booking, he is entitled to get 9 per cent interest or otherwise he would simply be entitled to 3 per cent as provided in the contract. Strange logic,” he said.