UP-Rera announces three measures to safeguard homebuyer interests
The authority has decided to form a special cell, bring in stringent regulation to curb fund diversion by realtors and carry out digitisation of housing land in the state’s 13 big cities, including Noida and Greater Noida
The Uttar Pradesh Real Estate Regulatory Authority (UP-Rera) on Friday prepared a new road map to resolve ongoing issues of homebuyers who are stuck in at least 200 delayed housing projects in Noida and Greater Noida.
The authority has decided to form a special cell, bring in stringent regulation to curb fund diversion by realtors and carry out digitisation of housing land in the state’s 13 big cities, including Noida and Greater Noida, thereby reducing the chances of buyers being cheated by developers.
These measures come after the Uttar Pradesh government and the new chairman of UP-Rera Sanjay Bhoosareddy realised that in the absence of tough laws, the realtors end up cheating innocent homebuyers in the real estate sector, said officials.
The UP-Rera said since the formation of this body in 2017, it has received 50,900 complaints of which 43,930 complaints have been disposed of successfully. And the remaining complaints are being addressed by the authority, officials said.
Nearly half the complaints that were resolved, or 52% of the 43,930 complaints, are from the National Capital Region, said UP-Rera officials.
“The UP-Rera has so far been successful in addressing the grievances of homebuyers but still we need reforms to make sure that the realtors do not take homebuyers for a ride. After discussions with the state government, we have decided to form a special cell and recruit more staff so that we can handle complaints with more transparency and accountability. The special cell will not only monitor the progress of each complaint but also ensure timely justice to the aggrieved buyer,” said Bhoosareddy, who joined UP-Rera after the tenure of the earlier chairman Rajive Kumar ended on June 30 this year.
The UP-Rera is introducing new applications so that it can address each complaint in a timebound manner and also execute follow-ups online in cases where the realtor delays the execution of its order, said officials.
“To contain the fund diversion we have devised a new method to regulate the fund collection and spending in a realty project. To make that happen, we have engaged banks at the state level and asked them to stay in touch with us on each realty project so that officials remain aware of how funds are collected from buyers and spent by a realtor. In a new project, a realtor will have to open three bank accounts -- one, to collect the funds from buyers, two, a ‘separate’ account, and three, an account for operational expenditures,” said Bhoosareddy.
The authority said at the time of opening of these accounts, the banks will take an advice letter from realtor that will empower the bank automatically to transfer 70% of collected funds into the separate account and 30% into expenditure account. Earlier, the bank had no such power without the time to time consent from the realtor.
“Now, before each transaction, the bank will inform the UP-Rera about the kinds of spending a realtor wants to carry out. Earlier, the realtor used to spend the funds collected at his will. We have decided to devise this method so that the funds collected is either spent on construction or payment of land cost or other required work on the project,” said the chairman.
The UP government has found that there are many cases, wherein the realtors have grabbed more land than they have purchased for a housing project in the state, said UP-Rera officials. Subsequently, they get the map approved for the land that they have in their possession, including the grabbed land.
“For example, a realtor has bought 100 acres from the government for a housing project. But he has got possession of 120 acres due to errors in calculation of the area or other reasons. They end up building more flats or develop more area and also sell the same to buyers. At a later stage, if the government bodies come to know of these errors, then the buyers end up losing money if their unit is built on land that was not legally bought by the realtor. To stop this, the government uploaded land records of 13 big cities, including Noida and Greater Noida, online in a digitisation campaign to maintain transparency. After digitisation, the government will approve the realty project’s building map only on the allotted land. This is the biggest change that will happen in new projects,” said Bhoosareddy.
The realtors and homebuyers have welcomed the new measures.
“The regulatory steps by UP-Rera will safeguard the rights of homebuyers. The move will accelerate growth in this sector that is witnessing a tough time in Noida and Greater Noida,” said Amit Kumar, executive director, Gardenia AIMS Developers Private Limited.
“If the UP-Rera or the government will be able to stop fund diversion, then the move will help the sector and the buyers will be able to get delivery in a timebound manner,” said Kapil Chauhan, a homebuyer.