A Strategic approach to Reviving Real Estate in Delhi - Handing Over of Almost Ready Residential Apartments

In the realm of real estate, a distinguished committee of 14 experts, led by the esteemed Amitabh Kant, has put forth a series of recommendations aimed at revitalising the Delhi real estate industry.

These proposals encompass various measures, one of which involves the transfer of flats in their current condition, allowing homebuyers to receive their properties without any further obligations to the builder.

This would effectively exempt them from paying the outstanding dues.

The proposed financing options encompass the provision of supplementary amenities for current residential mortgages through a strategic restructuring process, thereby classifying them as "standard assets."

Simultaneously, developers will have access to funds at a favourable rate, facilitating their projects. The primary emphasis of the suggestions presented to the esteemed ministry of housing and urban affairs revolves around enhancing the project's feasibility.

To achieve this objective, a range of measures has been proposed, including the implementation of a moratorium or a zero period to address the challenges posed by the Covid-19 pandemic and other factors such as construction restrictions.

The esteemed committee has proposed a commendable measure to decrease the interest rate, aligning it with the esteemed State Bank of India's marginal cost of lending rate as of June 1, 2020.

Additionally, they have recommended granting co-developers in the projects the privilege to partially surrender land, enabling the monetization of surplus land, and increasing the floor area ratio to enhance the feasibility of these projects. Once a builder decides to pursue the "rehabilitation package," they will be required to make an initial payment of 25% of the dues within a 60-day timeframe.

The remaining 75% can be paid over a period of three years, with simple interest applied. In instances where developers choose not to avail themselves of the revival package, the esteemed panel strongly recommends that either the state or the real estate regulator intervene and designate an administrator in cases where the project experiences a delay of two years or more.

The state Real Estate Regulatory Authority (RERA) will also need to identify projects that have reached a significant stage of construction completion, thereby enabling smooth handover of properties by ensuring all necessary approvals have been obtained. In these instances, properties that are nearing completion can be seamlessly transferred to homebuyers, allowing them to finalise the remaining tasks without the need to make the final payment to the builder. 

The esteemed committee has put forth a proposition suggesting that Swamih, the esteemed fund dedicated to the revival of stalled projects, be approached with utmost urgency to facilitate the procurement of funds. Furthermore, it is recommended that banks extend loans at a reduced interest rate, contingent upon the provision of a guarantee.

For individuals who have obtained a home loan and are currently facing non-performance of their account due to delays, it is recommended to consider treating them as "standard assets" for the purpose of additional disbursements related to the restructuring of existing mortgages. In order to expedite the resolution of cases, there have been plans put forth to establish five National Company Law Tribunal (NCLT) benches.