Page 31 - RERA Performance Report 2020

31 U.P. RERA PERFORMANCE REPORT 2020

Chapter 4

Rehabilitation of Projects by U.P. RERA

By Balvinder Kumar, Member U.P. RERA
With Dinesh Kumar Singh & Raghavendra Mandavilli

Rehabilitation of Stuck / Stalled Real Estate Projects in Uttar Pradesh

The Real Estate (Regulation and Development) Act, 2016 was enacted to protect the
interest of homebuyers as well as to boost investments in the real estate industry. This
objective can only be achieved by safeguarding both the supply and demand side of the
real estate market. Greater the perceived risk by existing and prospective homebuyers,
lower is their confidence to stay invested/make new investments in the real estate
projects, which in turn directly impacts the overall demand for existing projects. The likely
outcome of such a situation is that in some cases the promoters may find it difficult to
complete the projects they have launched.

The terms ‘Stuck / Stalled’ are used in the industry to define any project where the
construction work has come to a halt for a considerable period and the promoter does not
have plans or intent to address the underlying factors. These underlying factors could be
varied and may / may not be in absolute control of the promoter. The U.P. Real Estate
Regulatory Authority is striving to ensure that such stuck / stalled projects are revived and
interest of the homebuyers is secured.

Taking cognizance of several stuck / stalled real estate projects registered with Uttar
Pradesh Real Estate Regulatory Authority and increasing complaints from the
homebuyers, the Authority initially ordered an audit of over 160 projects which fell under
the jurisdiction of New Okhla Industrial Development Authority and Greater Noida
Industrial Development Authority. The audit findings assisted U.P. RERA in identifying
such projects where there has been considerable delay in construction and the promoter
had indulged in unfair practices or financial irregularities.

1. Section 7 of the RERA Act – Revocation of Registration

Section 7 of the RERA Act empowers U.P. RERA to revoke the registration of the projects
where:-

(a) The promoter defaults in complying anything required by or under this Act or the rules
or the regulations made thereunder;
(b) The promoter violates any of the terms or conditions of the approval given by a
competent authority;
(c) The promoter is involved in any unfair practice or irregularities.

U.P. RERA upon receipt of a complaint from allottees/association of allottees or on the
recommendation of a competent authority may issue a show-cause notice under section
7 of the Act directing the promoter to submit its response within specified time on why
the registration of the project should not be revoked. Till now, U.P. RERA has issued
show-cause notices for revocation of the registration of 36 projects, out of which 24 are in
Gautambuddh Nagar and 12 in Lucknow. The promoter is allowed sufficient time to
submit its explanation as provided under provisions of section 7 of the RERA Act.