Can Noida’s Long-Stalled Projects Finally Find Resolution?


Between 2009 and 2013, several middle-class people who had moved to Delhi from different states, settled their sights on the adjacent region of Noida, witnessing its thriving real estate market, that could offer them a chance at owning a home.

Ankur Srivastava (name changed) and his wife, were among the many, who had moved in 2004 from a small town near Kanpur, Uttar Pradesh, to work in the private sector in Delhi.

Ankur says, “Living away from our parents, we were looking to have our own house, where our parents could also join us, forming a home for our entire family.”

To get a house in Noida seemed like the perfect fit, which was presented to him and his colleagues, when a broker convinced them with a sales brochure that unfolded the envisioned plans for an upcoming high-rise apartment in Greater Noida.

Like many others, in 2010, Ankur and five others decided to book the houses, with a promised delivery in the next 36 months.

However, what seemed like a promising deal for Ankur, turned into a decade-long struggle.

The deal remained on paper for the next three years. By the expected delivery date, the construction site had only reached excavation for one of the multiple housing units in the project.

Ankur says, “I paid Rs 6 lakh down payment in next two months and chose a construction-linked plan through home loan, commonly chosen by others, where remaining payments were contingent on the project’s progress. Despite delays, the builder pressured us to stick to scheduled payment dates, even imposing penalties for delays.”

By 2016, when the towers finally stood tall, Ankur and fellow homebuyers had paid nearly 85-90 per cent of the amount, expecting the project to be completed soon.

As a middle-class individual on the unfamiliar terrain of home buying, he says, “You don’t buy houses more than once in your lifetime. We kept making payments, influenced by the developer’s reputable background in Delhi and also defaulting on my own lack of knowledge.”

Years passed, but the erected structures never reached completion. Finally, after a prolonged battle with almost 125 cases filed by homeowners, the builder handed over possession in 2020. However, the project remains unfinished and with no registrations to the buyers.

He shares, “Those 10 years took a toll on my mental health. I worked, paid rent for my Delhi house, monthly instalments for this incomplete home, using all of mine and most of my father’s savings. Now, we struggle with incomplete homes received.”

Since the same time period, more than three lakh homebuyers in Noida and Greater Noida have been encountering similar challenges. Numerous housing projects are stuck in the construction phase, and those who have received possession are living without official registrations in their names.

This issue of stalled housing projects has been infamous since a decade, with the struggles of lakhs of homebuyers going unheard and without resolution.

But why are we talking about this again today?

The Uttar Pradesh government, led by Chief Minister Yogi Adityanath, has stepped up to address the challenges of homebuyers and revive these stalled projects, that have also tarnished the area’s reputation for investments.

To solve the deadlock created for the last 15 years due to misconducts in previous governments, authorities, and developers, the state cabinet accepted recommendations from the Amitabh Kant Committee report on 19 December, aiming to assist homebuyers unable to gain possession or registrations due to developers’ financial defaults.

Tracing The Decade-Long Controversy

Mihir Gautam, a member of the Noida Extension Flat Owner Association, says, “During the Bahujan Samaj Party’s (BSP) rule, land for development was allotted at 10 per cent of the total land value in these regions, encouraging developers to create mass housing apartments.”

An enticing yet economical offer attracted many, including those primarily involved in property dealing, to venture into this development. Further, to begin the project, they were able to secure loans on the land.

“Riding the wave of real estate boom during that period, the developers successfully sold flats, attracting buyers with pre-launch offers. For several builders, the day of pre-launch offers itself accounted for nearly 50 per cent of the sales,” he adds.

However, with payment linked to construction progress, builders continued construction, receiving nearly 90 per cent of the payment by the time the final slab was completed.

Upon receiving the majority amount, builders began diverting funds. As demand increased, developers extended to obtain new lands by paying only 10 per cent to initiate new projects.

One homebuyer recounted, “There was a time when each of these builders had nearly 10 to 15 ongoing projects.”

Expanding beyond their means led to debt accumulation, defaults on bank loans, and on instalments for land payments to authorities.

As project delivery lagged and deadlines surpassed ample times, a series of failed projects damaged the reputation of many builders, causing potential buyers to withdraw.

This downturn in the real estate market by 2014-15, placed builders in a situation where debts surpassed amounts expected from homebuyers, making the projects financially unviable and forcing them to file for bankruptcy.

Consequently, most projects till today stand incomplete, some with possession granted with unfinished work and no registries due to outstanding dues of the developers.

Reports indicate that developers collectively owe approximately Rs 46,000 crore to development authorities in Gautam Budh Nagar, including Noida, Greater Noida and Yamuna Expressway Authorities. The Greater Noida alone has 96 such stalled projects.

In the face of these challenges, homeowners united for protest and meetings to address their critical issues. Many had to resort to renting homes, taking extra loans, or borrowing money just to get by in the city.

Mihir adds, “Our meetings became a way to unite everyone since there were no actions from the developers or authorities. People of all ages attended, trying to understand the situation and find solutions.”

He adds, “A scheme for retired senior citizens was also introduced by a developer, but got stuck. Our meetings had many elderly individuals who would come and sit in one corner, hoping to grasp the situation. Sadly, many of them have passed away, but the project remains unresolved.”

“However, with this new policy, people are appreciating the efforts of the Yogi government for taking some action through these recommendations.”

Many such high rise apartments lies stuck, while many homeowners are living in incomplete buildings. (Source: Swarajya)
Many such high rise apartments lies stuck, while many homeowners are living in incomplete buildings. (Source: Swarajya)


Will Actions Help The End Users Directly?

In March 2023, the Ministry of Housing and Urban Affairs established a committee chaired by Amitabh Kant to provide solutions for such stalled projects. Following this, the committee conducted five meetings, seeking inputs from various stakeholders before submitting its report.

Two significant recommendations include granting immediate possession and registry to home buyers, and providing zero period relief for from 1 April 2020, to 31 March 2022, to alleviate the impact of the pandemic and reduce the debt burden on builders.

While the recommendations emphasise unlinking registration from financial dues for stalled projects, the Uttar Pradesh government mandates developers to clear 25 per cent of total dues for property registration and complete the project within three years.

Additionally, after accepting the rebate through the zero period, developers are required to clear financial dues within 60 days for project registration.

The scheme also allows co-developers to take charge of stalled projects and complete them. (full report here)

While people see these recent actions as a progressive step after more than a decade of stagnation, there’s a consensus that more needs to be done since all recommendations again relies on builders to take actions.

A homebuyer says, “The approvals apply to a specific number of projects, as many other projects are in insolvency cases, which have been exempted. This has directly dashed the expectations of many buyers at present.”

During the panel meeting, homebuyers suggested removing the NCLT insolvency clause for real estate projects, as unlike for companies with various stakeholders, these home projects involve buyers as stakeholders who have paid the required amounts following all procedures.

Rajesh Sahay, general secretary, Noida homeowners’ federation (NOFAA), says, “Even if the builders pay, the construction costs have more than doubled since they started. How will they complete the construction now? The government may need to remove all bad debts of the builders, push them to finish the projects under scrutiny and provide homes to the original buyers.”

From the government’s perspective, these challenges also result in revenue loss through pending housing registrations and stamp duty. Initiating the registry process could generate significant income for the government, rather than relying on builders to settle their dues.

The committee also advocated to de-link registration grants to the homebuyers from the recovery of dues from developers.

Dinkar Pandey, another aggrieved homebuyer, says, “There is no transparency in the authorities’ actions on policy suggestions. We don’t know what the developers will do with these orders, since we have lost all trust in them. It is a good push from the government, but we still need to see if the developers and authority achieve positive outcomes within the given time frame.”

A Model For Other Cities

According to the Indian Banks Association, Noida and Greater Noida hold maximum concentration of stalled residential projects in the country.

In total, there are about 4.12 lakh homes across the country which are not completed due to the poor finances of the developers, with nearly half in the National Capital Region.

With focusing on Noida and Greater Noida, the stalled housing issue also extends to other cities, where the Uttar Pradesh government’s actions can serve as a potential model.

This move will help shed the debt trap and negative reputation associated with these regions, paving the emerging development in line with the rapid economic growth.

Since 2017, Uttar Pradesh’s regulations for new projects have become more stringent to break the nexus, where developers are now mandated to pay 100 per cent of the land amount.

While projects initiated in 2010 still linger unfinished, projects that commenced in 2018 are nearing completion, with nearly 30 per cent of possession already granted.

As the state government has contributed its efforts and sparked hopes, homebuyers now await tangible actions from authorities and defaulted developers, with concrete resolutions beyond paperwork and office discussions.