Unitech Group, Jaypee Group, Amrapali Group and a few other developers have been in the news for quite some time for non-delivery of housing projects they launched long ago. However, it appears that there are several other developers whose projects are languishing for over five years.
According to a report by ANAROCK Property Consultant, real estate consultants, “Housing units valuing ₹ 4,64,300 crore or 575,900 units launched in 2013 or before are delayed in Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai Metropolitan Region (MMR), NCR and Pune." About 210,000 units in MMR are running behind schedule, and 200,000 units in NCR. The combined value of these MMR and NCR units is about ₹ 3,70,000 crore, about 70% of the total value of delayed units in the seven cities.
PropEquity, a Gurgaon-based real estate data, research and analytics firm, said in a report released recently: “Over 4.65 lakh units of housing projects valuing ₹ 3.3 trillion across India are significantly behind their delivery deadlines with daunting construction delays."
“Over-leveraging, launching projects without approval, regulatory road blocks and failure to anticipate market are the reasons why these projects are running behind schedule," said Pankaj Kapoor, managing director, Liases Foras, a Mumbai-based real estate rating and research firm.
Also, many of these delayed projects do not even fall under the ambit of the Real Estate (Regulation and Development) Authority (RERA), 2016. “Despite the implementation of policies like RERA and GST, the issue of stalled or delayed projects that has primarily been at the core of buyers’ discontent is yet to be addressed satisfactorily," said Anuj Puri, chairman, ANAROCK Property Consultants.
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Dilution and delay in implementation of RERA is another reason. “RERA policies have been flouted across many states; several projects that have been ongoing since years do not come under its ambit due to dilutions. For instance, in Karnataka, all projects that are completed up to 60% or more are exempt from RERA purview. This is significant since maximum project delays occur post major structure formation and during the time of final finishing," said Puri.
Homebuyers stuck in delayed projects have limited options. “RERA may be effective in freeing only a limited amount of stuck inventory," said Puri.
Also, RERA comes into force only when developers delay the delivery beyond the date mentioned while registering the projects with RERA. Taking advantage of this, many developers have given new deadlines that are 3-5 years away. For instance, a project, “Delhi One", launched in 2010 by Boulevard Projects Pvt. Ltd, a special purpose vehicle (SPV) owned by directors of The 3C Company, a Noida-based real estate developer, was originally expected to be delivered in 2016, according to the sale agreement with buyers. However, as per the current status of the project on the Uttar Pradesh RERA website, the proposed end date of the project is 31 December 2023.
Some experts, however, see hope. “In the last few years, we have seen many developers going behind bars. Recently, Supreme Court ordered to attach the personal property of defaulting developers. Such stringent decisions could change things," said Kapoor.
Aggrieved homebuyers should form groups and approach RERA, consumer forums or the National Company Law Tribunal (NCLT).