Aiming at protecting the interest of home buyers while ensuring ease of doing business in real estate sector, the Centre has issued an advisory to all States / UTs and their Real Estate Regulatory Authorities (RERA) to automatically extend registration of all real estate projects registered under RERA by six months and further up to 3 months, if required in view of the COVID-19 pandemic.
The latest measures are expected to uphold and safeguard the interest of homebuyers for ensuring completion and getting delivery of flats/homes although with a delay of few months.
Subsequent to the announcement made by Union Finance Minister Nirmala Sitharaman, Ministry of Housing and Urban Affairs has issued an advisory to all States / UTs and their respective Real Estate Regulatory Authorities to consider the current pandemic of COVID-19 as “force majeure” being a natural calamity, which is adversely affecting the regular development of the real estate projects and extend registration of all real estate projects registered under RERA further keeping the pandemic in mind.
This measure will safeguard the interest of homebuyers to get them the delivery of their flats/homes although with the delay of few months but it will definitely ensure the completion of the projects, the ministry maintained.
In the past a lot of projects got stalled due to various reasons leaving lakhs of homebuyers in a very difficult situation, where they were running from pillar to post for their booked homes.
Therefore, it is vital to take remedial measures now to ensure that COVID-19 does not lead to a complete breakdown of the real estate sector.
Accordingly, in the prevailing circumstances, the primary objective is to address the concerns of homebuyers by ensuring suitable regulatory relief to the developers for completion of projects so as to create a win-win situation for all the stakeholders.
Ministry had wide consultation with all stakeholders including homebuyers, developers, financial institutions etc. and discussed all related issues threadbare to find the optimum solution of the situation created due to this sudden pandemic.
Further, an urgent meeting of the Central Advisory Council (CAC) of RERA was held on April 29, 2020 under the chairmanship of Housing and Urban Affairs Minister Hardeep Singh Puri, wherein it was decided unanimously to recommend to issue the advisory by the Central Government to treat the current pandemic as force majeure under RERA.
Due to situation created by the COVID-19 pandemic, nation-wide lockdown was announced from March 25, 2020. As a result, the construction work of ongoing real estate projects was halted leading to reverse migration of labourers to their native places. Further, there was large scale disruption in the supply chain of construction materials which adversely impacted the construction activities across the country.
It is also anticipated that construction activities in pre-monsoon could not be undertaken, which will further delay the construction cycle. Moreover, due to the impending monsoon season followed by festivals like Dussehra, Diwali, Chatth etc. the labourers are not expected to come back soon.
It is clear that in such circumstances, work on the real estate projects will take quite some time to restart in full gear. In the absence of urgent remedial regulatory measures under Real Estate (Regulation and Development) Act, 2016 [RERA], there is also a possibility of many real estate projects getting stalled leading to litigation.
This will ultimately result in non-delivery of flats to the homebuyers, who have invested their lifetime savings for their dream homes.