Homebuyers’ body urges Housing Ministry to act against realty projects’ timelines extension

Homebuyers’ pan-India body the Forum for People’s Collective Efforts (FPCE) has approached the Ministry of Housing & Urban Affairs (MoHUA) to oppose the decision of Maharashtra, Uttar Pradesh and Karnataka Real Estate Regulatory Authorities to provide second suo-motu extension to all active registered projects for completion.

It has urged the ministry to direct these states to withdraw their notifications granting such extensions provided to developers arbitrarily without any relief to homebuyers facing job losses and financial stress.

In August, Maharashtra RERA and Karnataka RERA extended timelines for project completion by 6 months, while Uttar Pradesh RERA extended the same by nine months in the backdrop of the second wave of Covid19 pandemic.

The homebuyers’ body has highlighted that last year too under the pretext of the pandemic, realty projects were provided a suo-motu extension of 6 months across the country, with an option for a further 3-month extension.

The Central Advisory Council (CAC) under RERA, in a meeting held in April 2020 had decided to offer such an extension. Following this, the ministry had issued an advisory to state RERA authorities to act.

FPCE, as a homebuyers’ body represented at the CAC, had opposed such a blanket extension, while seeking relief for homebuyers as they were facing hardships due to job losses, pay cuts, instalments and rents. However, these requests were not considered.

“It is also pertinent to mention that the CAC has not met since, possibly because the handle to give relief to builders has been handed over to the RERA Authorities in the States, and as an unwritten rule homebuyer’s agenda is not considered to be worth taking up for consideration by the CAC, which certainly smacks of pro builder bias,” FPCE President and CAC member Abhay Upadhyay said in a letter to Durga Shanker Mishra, Secretary, MoHUA.

According to him, the states of Maharashtra, UP and Karnataka, in blatant disregard to homebuyer rights, have given another extension to the realty projects under the garb of Covid19 second wave.

The ministry’s 2020 advisory has opened floodgates of extension and authorities are randomly providing blanket extensions even when there was no work stoppage nor complete lockdown announced either by central or by any state government.

It has also highlighted the entire second wave lasted for merely 2-3 months while extension has been granted for 6-9 months, which defeats any rationale or logic.

“It is also beyond our understanding how such decisions can be taken by RERA Authorities which is one sided, detrimental to one stakeholder, arbitrary and without any logical or legal basis,” Upadhyay said.

The direct repercussions of such extensions will have to be faced by homebuyers whose scheduled handover will now get delayed for more than a year assuming extended timeline is honoured.

Homebuyers will have to continue paying instalments and rent for extended periods despite facing hardship due to job losses and pay cuts. They will also not be able to get any corresponding relief either in the form of any additional tax relief or relief from payment of instalments or rent. The body is of view that such extension is bound to create unimaginable financial stress on the homebuyers.

“There is also a high probability that RERA Authorities of other States may follow suit and announce similar one sided, illegal and arbitrary extension of project completion timelines. Before that happens, it is necessary that Maharashtra, UP and Karnataka RERA Authorities are advised / directed to withdraw their notifications granting extension of timelines for project completion,” FPCE’s letter said.

The homebuyers’ body has requested the government to issue another advisory as was issued last year, this time in the interest of homebuyers, to all state governments and also to all RERA authorities to not offer any further extension in timeline for project completion.

Also, it has suggested that those RERA authorities who have already extended the timeline need to withdraw such notification and cancel any timeline extension already given under the notification as such extension defeats the purpose of RERA as its intent for balanced and fair decision making by the regulator for all stakeholders is now under threat.