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Business News/ Money / Personal Finance/  What does a project’s deregistration mean for homebuyers?

What does a project’s deregistration mean for homebuyers?

Last week, the Uttar Pradesh Rera had cancelled the registration of two projects of Ansal API

Photo: iStockPremium
Photo: iStock

The Uttar Pradesh Real Estate Regulatory Authority (Rera) last week cancelled the registration of two Lucknow-based projects of developer Ansal API. The authority had found severe financial irregularities, diversion and siphoning of funds amounting to 606 crore, which was diverted from the projects for other purposes.

The decision was taken after the developer was not able to provide any satisfactory response to the deregistration notices before the authority. The Rera Act enables the regulator to deregister a project. The authority can revoke such registration in the circumstances where the promoter defaults in taking any action required under Rera or violates any terms and conditions of the approval or is involved in any unfair or fraudulent practices, among others.

These are not the first projects that have been deregistered by the UP Rera. In 2019, three phases of the housing project Aranya and Sampada Livia were deregistered by the UP Rera.

Let’s understand what recourse homebuyers have in case of deregistration of a project.

After the deregistration, the onus to complete it and provide timely possession to homebuyers shifts to the authority. In that sense, deregistration is a ray of hope for homebuyers stuck in stalled projects. “Section 8 of the Rera authorizes the authority to consult with the relevant state government to carry out the remaining development works either through the appropriate local government authority or the association of allottees. Further, the authority will provide the association of allottees with the right of first refusal for completing the remaining development works in the concerned project," said Neerav Merchant, partner, Majmudar & Partners.

If the association of allottees refuses to undertake the completion of the remaining development work, the Rera then consults with the appropriate local government authority responsible for the development of land to facilitate the project completion.

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Published: 16 Feb 2021, 05:37 AM IST
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