Real Estate has been the to-go option for investment since a very long time now and with upcoming projects all around, there is a boom in the real estate industry. Every nook and corner of cities are filled with flats built by builders with the provision of facilities so tempting that no one can resist buying. But more than often now we see the buyers deprived of their flats due to the lack of funds that lead to non-completion of projects.
The buyers are forced to wait for the possession of their flats because the projects are left incomplete due to the financial crunch that takes place from the builder’s side and it is the buyers who end up suffering. To top it all, the builders are so cash-strapped in today’s times that they do not have the sources to even pay back the amount to the buyer who was once interested in their projects.
In this case, what can the buyer do? The buyer can file a case against the builder in the consumer court and get an order against the builder to make him pay for the late delivery of the flat, or refund the full amount to the buyer. But what if the builder is too broke to honor the order?
Well, the Uttar Pradesh Real Estate Regulatory Authority (UP-RERA) has answered this question and gotten a relief to the thousands of buyers in the vicinity of Greater Noida, Ghaziabad, Noida who are at the financial crux because of the builders not being able to fulfill their promises of delivering a home to them.
What does the UP-RERA have for the homebuyers?
The Regulatory Authority has issued about 660 recovery notes in the past, to the builders through the district administration of Gautam Budh Nagar, which aims to seek a refund of money from the builders to the homebuyers. However, none of the developers/builders have honored the recovery notes. Hence, to help the buyer seek their rights over their money, the authority has now decided to auction unsold flats of the builders in a relatively lower price, to start collecting funds. These funds would later be used to compensate the buyers and the investors who have had their money been not made to the best use. This move has been welcomed by all the grief-stricken buyers who once thought they had no option to get their back. It is also a blessing to the investors who had invested in these projects with the hope of it inculcating financial benefits but in vain.
How will the auction take place?
An E-auction will take place where the unsold properties will first be categorically listed. This listing will be done by the officials of the administrating authority, who will investigate all the flats that haven’t had any buyer bid for it in the first instance. The administration will then take physical possession of these flats and start the auction. A central agency has been roped by the administration to create a website and display the flats for auction. The reason these flats are sold for a lower price is for an easy recollection of funds that are going to be used to pay back the aggrieved buyers.
This move by the UP-RERA is all set for the builders to lose their hold from their projects as they have been nothing but irresponsible in carrying out a very simple transaction of providing the buyers with flats from their own money.
A reality check:
As per the RERA Act, elite builders like Cloud 9, Shubhkamna, Unitech, 3C’s among others are facing this drill due to their inability to fulfill their promises to the buyers. As of now, only Rupees 26.37 Crores have been collected for the year of 2019-2020. As per the official reports, Rupees 25.93 Crores have been recovered for the year 2018-2019. There is still recovery of about Rupees 450 Crores pending pitted against 860 recovery notes issued around NCR.
With this reality check, we’re a little hopeful that this upcoming regulation will yield the authority with good enough funds that would quench the financial crunch of homebuyers, who have been suffering for no faults of their own and teach a valuable lesson to the builders to not fleece the buyers in the name of ‘State-of-the-art infrastructures and facilities’.