The Union Housing and Urban Affairs Ministry will advise States and Union Territories and their regulatory authorities to extend the registration and completion date of real estate projects by six months as part of economic relief measures announced by Finance Minister Nirmala Sitharaman on Wednesday.
Referring to the announcement, Housing and Urban Affairs Minister Hardeep Singh Puri said in a tweet: “Relief measures announced by @FinMinIndia for India’s real estate sector will benefit home buyers, builders & other stakeholders who have been demanding these initiatives to counter the adverse effect of the pandemic crisis on construction activities in our urban areas. (sic).”
In another tweet, he said the six-month extension and treatment of the COVID-19 pandemic as an event of force majeure, like a natural calamity, under the Real Estate (Regulation and Development) Act would “de-stress the sector and ensure completion of projects so that homebuyers are able to get delivery of their booked houses with new time lines.”
The States’ Real Estate Regulatory Authorities would give a six-month extension to registered projects expiring on or after March 25. If required, a further extension of three months could be given.
In a statement, the MoHUA said: “Due to situation created by the COVID-19 pandemic, nation-wide lockdown was announced with effect from March 25, 2020. As a result, the construction work of ongoing real estate projects was halted leading to reverse migration of labourers to their native places. Further, there was large scale disruption in the supply chain of construction materials which adversely impacted the construction activities across the country.”
The Ministry noted that pre-monsoon construction could be started, leading to further delay in the construction cycle.
“It is clear that in such circumstances, work on the real estate projects will take quite some time to restart in full gear. In the absence of urgent remedial regulatory measures under the Real Estate (Regulation and Development) Act, 2016, there is also a possibility of many real estate projects getting stalled leading to litigation etc.”