The Uttar Pradesh Real Estate Regulatory Authority (UP-RERA) has urged the Uttar Pradesh state government to direct all development authorities and housing boards to charge interest on all dues at marginal cost of funds based lending rate (MCLR) of State Bank of India (SBI) from home buyers, promoters, as well as group housing societies.
After the Supreme Court’s February and July 2020 order to Noida and Greater Noida authorities to restructure all dues from developers and link it to the MCLR from January 1, 2010, these recommendations have been made by UP-RERA. For period prior to 2010, the authorities were directed to charge as per allotment terms.
According to the Supreme Court’s order, the authorities must recalculate due amount within one month and developers must pay 25% of the dues within three months and rest of the amount in one year. If the payment is not made within one year, the rebate will stand cancelled.
UP-RERA has hence made similar recommendations to the state government to direct all development authorities and housing boards so that the same benefit can be passed to all home buyers and developers.
In a separate letter written to the Chief Secretary – Housing and Urban Planning Department And Industrial Development Authorities, UP-RERA has also recommended that all dues from April 4, 2016 of allottees of group housing and independent plots/apartments be charged at MCLR of 9.35% .
If these recommendations are approved, they will help stuck or delayed projects, financial stress of various projects and reduce the disputes between home buyers and builders. It will also help development authorities to recover their stuck dues, according to UP-RERA.