RERA pitches for one-time debt recast in realty

Real estate regulators will write within a week to the RBI, seeking one-time debt restructuring for the industry to help developers overcome the liquidity issues, Uttar Pradesh RERA Chairman Rajive Kumar said on Saturday.

Industry bodies CREDAI and Naredco have been demanding one time restructuring of developers outstanding loans with financial institutions to prevent bad loans and making them eligible for fresh borrowings.

Addressing a webinar, he said the decision to extend timelines for completion of projects by six months has been taken for the benefits of home buyers and ensure customers get possessions of their flats.

Kumar asked developers not to impose any penalty on home buyers for any default in payments of their instalments during this coronavirus pandemic.

“One big issue faced by the industry is liquidity challenge for quite some time,” he said, adding that many stalled projects do not qualify for getting last mile funding from the ₹25,000 crore special window created by the government.

All India Forum of Real Estate Regulatory Authorities (AIFORERA) has decided to take up the issue of one-time debt restructuring with the RBI, said Kumar, who is the Chairman of this new association.

He informed that the forum will write to the Reserve Bank of India in the coming week.

The UP-RERA chief was speaking at a webinar organised by property magazine Realty & More and public relation firm ICCPL on completion of three years of realty law RERA.

Kumar also warned builders to comply with the orders passed by the authorities, else it would be forced to take action as per the provisions under the law.

On home buyers grievance that builders got relief from regulators and not them, the UP-RERA chief said the extension of timeline for projects completions would ensure that flat owners get keys of their home.

Kumar asked builders not to levy any penalties or charge interest for any delayed payment by their customers during this pandemic and also assured that this factor would be kept in mind while passing the orders.

Speaking at the event, PropTiger and Housing.com CEO Dhruv Agarwala said the RERA has been a “massive boon” for the entire real estate eco-system and helped immensely in bridging the trust deficit between the developers and property buyers.

“Consumers see RERA as an effective recourse if something goes wrong,” he added.