CREDAI seeks waivers to bailout realty sector

Gurugram, March 28

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With the realty sector facing unprecedented losses due to corona virus spread, the Haryana Zonal Chapter of Confederation of Real Estate Developers’ Associations of India (CREDAI) has appealed to the state government to allow relaxation in rules and regulations for developers.

“The real estate sector contributes to 10 per cent of the National GDP and is the second-largest employer in the Country and due to this pandemic; the real estate industry would be drastically impacted. We believe that relaxations would be in the larger interest of not only of the sector but all stakeholders, including the customers,” said, Kushagr Ansal, President of CREDAI Haryana.

“Due to this pandemic, committed financial inflows, as well as finances through sales, are gravely impacted at this initial stage itself. The developers perceive finances from various financial institutions including banks and NBFC’s to remain negligible due to this pandemic and would lead to a serious liquidity crunch in the coming months which in turn will hamper project finances and will impact the work at projects in coming months”, he added.

The sector is already facing an acute shortage of construction materials due to import restrictions and shut down of state borders leading to supply-chain issues and heavy escalation in prices of materials. Construction sites have been locked-down due to the Covid-19 virus. Delay in payments from the customers is another critical issue in the present market conditions and after the extended lock down, the customers might not be in a position to make the payments and this would be a major setback for the sector. On the other hand, Developers are under extreme pressure from the authorities, financial institutions for meeting their deadlines and for payment of loan instalments on time.

CREDAI has sought exemption in payment of interest on external and internal development charges, fee waiver and more time for renewal of licenses, among other things.

BOX

Exemptions sought

a.) Exemption of payment of Interest on EDC/IDC w.e.f. 15th February 2020 for a period of one (1) year;

b.) EDC / IDC needs to be determined in a rational manner;

c.) Process of necessary approvals for the development of a Project shall be taken up with urgency without the prerequisite of Bank Guarantee(s) and other charges;

d.) Exemption / Waiver of fees in relation to compliances of Rule(s) 24 and 26(1) & (2) of the Haryana Development & Regulation of Urban Area Rules, 1976;

e.) Release of Building Plans and other approvals which are being help-up due to payment of fees / charges;

f.) Extension of timelines by at least six (6) months for renewal of licenses and similar extension period for already renewed licenses; and

g.) Extension of the timeline to do compliances of ‘Letter of Intent’ (‘LOI’) for issuance of new Licenses from 60 days to 180 days.