Real estate professionals emphasize the need for investors to proceed with caution, thoroughly researching developers' reputations, project approvals, and their historical track records.
In a significant development, approximately 6,500 apartments could soon be registered in Greater Noida as more than thirty developers have agreed to settle their financial obligations, following the Uttar Pradesh government's 2023 real estate policy. For those interested in the real estate sector, here are essential insights to keep in mind.
Under this initiative, the developers of thirty housing projects currently on hold in Greater Noida will be allowed to register the mentioned apartments after clearing a total debt of Rs 350 crore.
Saumya Srivastava, the additional chief executive officer of the Greater Noida Authority, stated, "A minimum of thirty developers in Greater Noida have signed an agreement to pay 25% of the outstanding balance and execute registries of available units in delayed housing projects. We are actively encouraging all realtors to take part in this program to secure permission for registrations and alleviate the challenges faced by homebuyers.”
Additionally, thirteen real estate developers in Noida who have also embraced the government’s scheme reflect a proactive approach to settling their overdue debts.
What is the UP Government's Policy?
The policy does not impose penal interest on real estate developers who halted construction during the two-year COVID-19 pandemic or as a result of court directives.
Officials predict that an additional thirty developers are likely to follow suit and pay their pending dues. These developers have agreed to pay 25% of their total dues minus any penal interest to gain access to the apartment registrations.
What Are the Total Outstanding Dues?
The policy currently encompasses 57 housing projects in Noida, amounting to 32,000 units, alongside 96 projects in Greater Noida, totaling 75,000 units. Estimates suggest that realtors in Noida owe about Rs 8,000 crore, while those in Greater Noida owe roughly Rs 5,500 crore for stalled projects.
What Happens If Developers Default?
Should developers fail to meet their financial obligations, the government can revoke their project allocations under this policy. Additionally, the three industrial bodies—Noida, Greater Noida, and Yamuna Expressway—are empowered to place defaulting developers under a five-year moratorium, ensuring accountability.
Officials indicate that out of the total 75,000 units in Greater Noida, at least 96 projects are stalled yet may greatly benefit from the newly implemented 2023 policy.
Timeline for Completion
Once the necessary approvals are granted by the authority, the complete process is expected to conclude within two to three months. three committees led by deputy general managers are being set up by the authority to drive remaining realtors to resolve their outstanding debts and secure registry permissions.
Registry in Noida
Among the 57 housing developers with stalled projects in Noida, only 13 have taken the step to fulfill their payment obligations after receiving interest waivers from the new policy.
The Noida Authority is pressuring developers to settle their land dues by December 21, 2023, or face severe repercussions.
The reasons behind the slow payment rates from Noida developers are noteworthy; of the 57 realtors with suspended projects, only 13 agreed to pay up after applying for interest waivers.
So far, seven of those developers have already completed their payments, two are in process, and they aim to obtain their registration authorizations.
Developer Behavior Comparison
Why is there a noticeable disparity in payment behaviors between Noida and Greater Noida developers? Developers in Greater Noida are quickly settling their debts, partly due to the waivers which reduce their liabilities to the authority. Notably, major Noida developers like Supertech Group, ATS, Prateek Group, and Gardenia Glory have debts surpassing Rs 100 crore and are among those demanding more waivers before committing to payments.
Officials from the Noida Authority remarked, "These developers also demand more waivers before they decide to pay up the dues,” highlighting the challenging negotiation environment.
Conversely, Greater Noida authority officials reported that more developers are coming forth to clear their dues since their outstanding amounts are generally below Rs 100 crore.
Guidance for Property Buyers
For potential buyers looking at properties in Greater Noida or Noida, several factors must be taken into consideration. The willingness of developers to settle their debts paves the way for project advancements and potentially quicker completion timelines. However, avid investors must undertake careful scrutiny of developers’ reputations, project approvals, timely completion records, and overall financial health prior to any investment decision.
To expertly navigate the market’s complexities and make informed choices, it's wise to consult a qualified real estate advisor when in doubt. Reputable consulting firms can offer reliable information, unlike smaller brokers who might be unregulated and prone to providing misleading information simply to close a sale.
“It is important to monitor the policy’s progress and the developers’ compliance to obtain a clearer picture regarding its effectiveness in expediting project completion,” he concluded.