Calling it a much-needed relief for the real estate sector, the industry experts said that the extension of registration and completion date of projects under RERA would de-stress developers as the construction activity has come to a standstill.
"To treat Covid-19 as an event of 'Force Majeure' under RERA will provide major relief to real estate developers whose projects have been stuck due to lack of liquidity and cash flow stoppages," said Ravindra Sudhalkar, CEO, Reliance Home Finance.
In a bid to destress real estate developers and ensure completion of projects, the government on Wednesday announced the extension of registration and completion date of real estate projects under RERA suo-moto by six months for all registered projects expiring on or after March 25, 2020 without individual applications.
"The government has extended the timeline for project completions and registration by six months. This is a big move that will de-stress developers significantly, since construction activity had been halted all across the country. Homebuyers' wait for their homes will get extended by this move, but this was in any case inevitable," said Anuj Puri, Chairman, Anarock.
Meanwhile, to provide relief to the contractors, the government announced that central agencies like Railways, Ministry of Road Transport and Highways and CPWD would give an extension of up to six months for completion of contractual obligations and extension of concession period in Public-Private Partnerships (PPP) contracts.
"For road sector contractors and PPP concessionaires, a standstill period of six months has been announced with no associated penalties for not meeting project milestones, an automatic extension of contract period etc. This is an example of simplifying the investment climate with contractors/ concessionaires not having to seek an extension on a case by case basis," said Arindam Guha, Partner, Government and Public Services, Deloitte India.