Disappointed by the plethora of stalled housing projects across the country and widespread apathy among real estate developers, homebuyers have prepared their own wishlist from the soon-to-be-announced Union Budget for the financial year 2019-20 seeking a Rs 10,000 crore stress fund to help complete stalled projects.
“Despite RERA (realty law), most of the ongoing projects have not been completed. It is time now to end this problem by creating a ‘stress fund’ to the tune of at least Rs 10,000 crore to complete stuck real estate projects on a pan-India basis,” said the recommendation, which was forwarded to the finance minister by the Forum For People’s Collective Efforts (FPCE).
The objective should be to complete all pending real estate projects pan-India within a span of five years, it said.
“You are aware there are over five lakh home buyers whose hard-earned life savings are stuck in different real estate projects across the country due to indefinite delay and fund diversion by builders,” FPCE President Abhay Upadhyay said, pitching for the creation of the fund to end the mental and financial distress inflicted on these home buyers.
The association has also demanded that home buyers should be categorised as primary secured creditors.
“This has also become a breeding ground for seeking insolvency proceedings under the Insolvency and Bankruptcy Code, 2016, under which the home buyers are categorised as unsecured creditors, thus putting their life’s savings at risk,” the memorandum said, adding that “this will clean-up the sector, infuse rapid development, restore faith in the sector, and with strict implementation of RERA, the chances of recurrence of such delays will be minimal.”
According to ANAROCK Property Consultants, India’s top seven property markets have a total stock of 5.6 lakh delayed housing units worth a staggering Rs 4,51,750 crore.
Most were launched either in 2013 or before that. The National Capital Region (NCR) alone accounts for about one lakh stalled homes stuck in insolvency proceedings or other financial crises.