RERA to approach RBI for one-time debt recast to overcome liquidity crisis

Real estate regulators will write within a week to the RBI, seeking one-time debt restructuring for the industry to help developers overcome the liquidity issues, Uttar Pradesh RERA Chairman Rajive Kumar said on Saturday.

Industry bodies CREDAI and Naredco have been demanding one time restructuring of developers outstanding loans with financial institutions to prevent bad loans and making them eligible for fresh borrowings.

Addressing a webinar, he said the decision to extend timelines for completion of projects by six months has been taken for the benefits of homebuyers and ensure customers get possessions of their flats.

Kumar asked developers not to impose any penalty on homebuyers for any default in payments of their installments during this coronavirus pandemic.

"One big issue faced by the industry is liquidity challenge for quite some time," he said, adding that many stalled projects do not qualify for getting last mile funding from the Rs 25,000 crore special window created by the government.

All India Forum of Real Estate Regulatory Authorities (AIFORERA) has decided to take up the issue of one-time debt restructuring with the RBI, said Kumar, who is the Chairman of this new association.

He informed that the forum will write to the Reserve Bank of India in the coming week.

The UP-RERA chief was speaking at a webinar organised by property magazine Realty & More and public relation firm ICCPL on completion of three years of realty law RERA.

Kumar also warned builders to comply with the orders passed by the authorities, else it would be forced to take action as per the provisions under the law.

On hombuyers grievance that builders got relief from regulators and not them, the UP-RERA chief said the extension of timeline for projects completions would ensure that flat owners get keys of their dream home.

Kumar asked builders not to levy any penalties or charge interest for any delayed payment by their customers during this pandemic and also assured that this factor would be kept in mind while passing the orders.

Speaking at the event, PropTiger and Housing.com CEO Dhruv Agarwala said the RERA has been a "massive boon" for the entire real estate eco-system and helped immensely in bridging the trust deficit between the developers and property buyers.

"Consumers see RERA as an effective recourse if something goes wrong," he added.

Quoting a survey done by Housing.com, Agarwala said that 81 per cent of respondents want to buy ready to move in flats or ones nearing completion , reflecting distrust in consumers mind towards builders.

Supertech Chairman R K Arora said a regulator was needed in the sector and the RERA law has helped in trust building.

Gulshan Homz Director Deepak Kapoor said the RERA has brought financial discipline in the development of real estate projects.

Gaurs group MD Manoj Gaur said the law has brought credibility in the sector and developers feel proud in saying that their projects are registered under this law.

He, however, suggested that the government's development authorities and financial institutions should be brought under the ambit of RERA to make everyone accountable.

Bhutani group CEO Ashish Bhutani said the RERA has brought transparency in the real estate sector and the developers do not have to make extra efforts to market products to prospective buyers, especially NRIs.

RERA expert Venket Rao said the complaints of home buyers could rise due to the current pandemic and efforts need to be made to resolve them amicably.