Homebuyers' body urges PM to include non-RERA projects in Rs 25k-cr fund

Some banks have already started assessing the number of bad loans that can arise from buyers of developers not paying EMIs

Homebuyers' body FPCE on Friday asked Prime Minister Narendra Modi to modify eligibility conditions for the Rs 25,000 crore real estate bailout fund to include financing of housing projects that are out of the ambit of RERA law because of varied legislations in some states.

In a representation to the Prime Minister, it also wanted the government to constitute a task force to bring better control over the fund and prevent its misuse.

Forum for People's Collective Efforts (FPCE) President Abhay Upadhyay requested the Prime Minister to modify the condition that "projects should be RERA registered to projects should be of pre RERA period in order to be fair and just with all homebuyers of delayed projects".

He sought constitution of a task force "to bring in more transparency and better control over funds and prevent its misuse."

On Wednesday, the government approved a Rs 25,000 crore fund to help complete 1,600 stalled housing projects, including ones that have been declared NPAs or admitted for insolvency proceedings. The move is likely to help 4.58 lakh housing units across the country. Only RERA-registered projects with positive net-worth will be provided funds.

The Real Estate (Regulation & Development) Act, which became effective from May 2017, provides for setting up of regulators in each state. The law made it mandatory for developers to register all ongoing projects that have not received completion certificate.

The association pointed out that West Bengal, which has chosen not to implement RERA, has enacted its own law -- West Bengal Housing Industry Regulation Act, 2017 (WBHIRA).

"This is in gross violation of the Constitution and in complete disregard of a Parliamentary law. However, we have challenged the constitutional validity of WBHIRA before the Supreme Court," Upadhyay said.

Moreover, the association said there are some states like Telangana, Haryana, Uttar Pradesh, Andhra Pradesh, Karnataka, Tamil Nadu, Punjab, Maharashtra, Madhya Pradesh and Chhattisgarh which through their rules under RERA have illegally kept either all ongoing projects or some out of the ambit of the real estate law to please builders.

There are others like Himachal Pradesh and Kerala where regulatory authorities have just been constituted and hence significant number of projects are yet to be registered, it said.

"It is worth reminding that the act of West Bengal to enact WBHIRA and ignore RERA; or that of some States to either illegally remove ongoing projects' from RERA or go slow in implementing RERA, has been beyond the control of home-buyers. In-spite of our repeated appeals to the State Governments, there is no respite for home-buyers from these delays / illegalities," Upadhyay said.

Homebuyers of delayed projects in all these states cannot be punished for no fault on their part, he added.

"This special window has not been created under RERA nor it's disbursal will be under the provisions of RERA. Hence, selection criteria should be altered to include all ongoing projects launched prior to RERA," Upadhyay said.

That apart, the association demanded more transparency in the selection criteria of real estate projects for funding from special window and in its disbursal.

"Considering the track records of builders who are responsible for the NPAs of banks to the tune of ninety thousand crores, they should be kept at arms-length and no funds should be disbursed directly to them. This is also necessary because we still do not have any such mechanism to track either diversion of funds or its misuse," he said.

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