EMI for Homebuyers may inflate due to stuck registries of flats in Noida

Alongside the delays plaguing housing projects, individuals purchasing homes in Noida confront a fresh challenge. With the registration of numerous apartments encountering obstacles, homebuyers are being notified by their respective banks that they will be subject to an additional 2% per annum on fixed interest rates. This notification is being disseminated by both public and private sector banking institutions.

Reason for Notices

These notifications dispatched by the banks explicitly state the underlying cause for the postponements in the registration of the properties. The banks make reference to specific stipulations outlined within the sanction letter that was originally signed between the buyer and the lending institution at the time of the home loan acquisition.

Under these terms, the apartment purchaser is obliged to furnish all pertinent documentation concerning the finalization of the sales deed within a 60-day timeframe, commencing from the date they receive the possession letter from the property developer. Failure to comply, the buyer will be mandated to remit an additional interest charge of 2% per annum, which will be supplementary to the prevailing interest rates already in effect. The bank will then levy these obligatory interest rates and augment the outstanding balance on a monthly basis. It is crucial to understand that any failure to settle these incremental charges could potentially reflect negatively on the buyer's credit rating moving forward.

Plight of Sports City Buyers

Notably, those who acquired apartments situated in sectors earmarked for the Sports City development have been disproportionately affected. In response to these freshly issued notices, a multitude of affected purchasers has sought intervention from the district's central bank manager to mediate the situation.

Issues Between Noida Authority and Private Developers

Narendra Kumar, a central government employee, purchased a 3 BHK apartment located in Civitech Stadia, Sector 79, in March 2017. “Several months ago, I received a notice from my bank that I should pay additional interest. Since I did not submit sale deeds after receiving possession of the flat, they quoted part of the agreement letter", says Narendra Kumar. Kumar invested a sum of Rs 68 lakhs in the acquisition of his apartment, securing a loan amounting to Rs 58 lakhs. If this incremental interest rate of 2% is applied, Kumar's existing monthly EMI, which currently stands at Rs 56,500, stands to increase by a minimum of Rs 5,000.

Narendra Kumar, said that he formally responded to the issued notice and anticipates a resolution to materialize imminently. The buyers of the Sport City venture received offers for their respective apartments. They, along with their families, have been inhabiting these residences for a period of three years. Notwithstanding, the formalization of sales agreements, as well as the registration processes, have been protracted as a consequence of the persisting discord between the Noida Authority and various private developers engaged in the development of residential complexes within Sectors 101, 78, 79, 150, and 152.

Though developers of the Sports City initiative have duly remitted the land premium, they find themselves unable to execute the requisite tripartite agreement involving the Authority and the purchaser. This is because they have not yet successfully established the requisite infrastructure and sports facilities that adhere to the established regulatory guidelines.

Vedas Ratna, the manager of the Lead bank, conveyed that a meeting is slated to occur in the near future. Vedas Ratna stated, "We are talking to more banks and we will accept applications from affected buyers in a meeting with the district magistrate. We may need to contact the Reserve Bank of India for further instructions.”