HARERA reins in developers of stalled project

Geetu Vaid

Haryana Real Estate Regulatory Authority has stolen the limelight from Maharashtra Real Estate Authority through a landmark decision last week. The exemplary work done by the Maharashtra Real Estate Authority in execution of RERA clauses and in granting relief to homebuyers is often quoted as an example of how RERA should be implemented in other states too. But this time around it is HARERA that has set a new benchmark for establishing best practices in the realty sector in the state. In a first-of-its-kind decision Haryana Real Estate Regulatory Authority, Gurugram exercisd its powers  under RERA and came down heavily on two developers in a joint project that had been delayed for over three years. Sending a strong message across, the regulatory body barred the two developers from creating third party rights on balance land in a delayed project. 

The project under HRERA radar is the 47-acre Greenopolis  in Sector -89, Gurugram, being developed by Orris Infrastructue Pvt Ltd  & 3C Shelters Pvt Ltd jointly. As many as 1,800 apartments were sold  in 29 towers launched in 2012-2013 by the two groups when the project was launched. The project was to have 38 towers in all having over 2,500 apartments. As per the joint agreement, Orris was entitled to 35 per cent of developed area, while 3Cs was entitled to 65 per cent of  the total developed area. However, the pace of work remained slow in spite of the fact that a majority of buyers had paid over 90 per cent of the cost of an apartment. The 2015 completion deadline was missed by the developers even as buyers alleged that the builders had collected over Rs 1,100 crore from them.  Till date only 50 per cent of the phase is alleged to have been  completed. To make the matters worse the two developers signed a relinquishment deed to transfer 10 acres of prime project land, taking it out of the joint development understanding, thus stripping valuable asset from the project. 

In response to the complaint of the aggrieved buyers under the banner of Greenopolis Welfare Association,  HARERA has put a stay on alienation/creation of any kind of rights, encumbrance, sale, transfer etc on remaining land & FAR of 82,258 sq m available on 10 acres of prime land. The regulatory authority also appointed a Financial Auditor and Quantity Surveyor for due diligence exercise of the project. 

A committee under Senior Town Planner and counsel of the parties has also been set up to suggest a pragmatic solution based on the reports of both Financial Auditor and Quantity Surveyor within four months. Commenting on the decision Venket Rao, Founder, Intygrat , who appeared on behalf of Greenopolis Buyers Association said, “This is a first-of-its-kind order under RERA in the country. We are very glad that HARERA has accepted our plea for stay on land and due diligence of  Greenopolis project. It is the first step in moving towards a solution, as substantial value subsists  in the project  and can be leveraged for completion of the project. HARERA has constituted a committee for suggesting a pragmatic solution for completion of the project. It is for the first time that any Real Estate Regulator in the country has taken the initiative to find a solution to a stuck project. With such large number of delayed projects in the country, especially in the NCR region, this order is expected to be ray of hope to helpless buyers.”