To Help Buyers, Noida Authority Extends Further Largesse To Builders

In a move that would not only help homebuyers, who have been waiting for years to get possession of their units but also real estate developers, who are sitting on huge inventory stock, the Noida Authority has decided to offer occupation certificate (OC) for flats in proportion to the paid land cost.

Since developers have been consistently defaulting on the payment they have to make to the Noida Authority with respect to the land they acquired from the authority, the latter have not been issuing OCs. Land to these developers was issued during 2007-2008 for which they paid only 10 per cent of the total cost. The remaining cost had to be paid in installments. The Noida Authority has been trying every trick in the book to recover over Rs 20,000 crore from 94 developers, who have failed to deliver their projects, and who have in turn not been able to pay their dues.  

Note here that a flat cannot be registered without the project having received an OC. The scheme by the Noida Authority, largesse of sorts extended to developers, would help thousands of homebuyers to get their properties registered.

How would it work?

Earlier, the Noida Authority was offering OCs for a project only after the builder deposited 10-15 per cent of total land dues. Since developers have not been able to pay even that much, the authority has made further correction. It has decided to offer OCs without builders having to pay remaining land dues.

In case a developer owes the authority Rs 100 crore and has paid Rs 60 crore, the former would deduct 10 per cent of the paid amount (which amounts to Rs 6 crore) and issue OCs to flats in proportion to the remaining Rs 54 crore.

While all homebuyers would not get relief from this scheme, some of them certainly would.