Khattar seeks details of action against builders not completing projects after 3 extensions

NEW DELHI: Housing and urban affairs minister Manohar Lal Khattar has sought details of the number of realty projects in which deadlines have been extended and the action taken against developers whose projects remain incomplete even after three extensions. The move comes amid rising concerns over builders failing to meet project completion deadlines despite committing to the same during the mandatory registration process under RERA.

As per the minutes of the last meeting of Central Advisory Council (CAC) -- which was attended by representatives of state RERAs, state govts, consumer bodies and builders -- made public this week, Khattar passed the instructions in response to an observation by Haryana RERA chairperson Arun Kumar that the timeline for project completion is declared by the promoter at the time of registration. He had said, “If the promoter fails to deliver the project within this time frame, delay possession charges will be applicable.”

Khattar also said that Rules framed by states for the sector should be vetted at the Central level to ensure uniformity. He further called for action against banks in cases where cash had been withdrawn from escrow accounts without proper permission.

An escrow account for a housing project is managed by a bank, which holds homebuyers’ money and releases it to the builder only after certain project-related milestones are met. This ensures use of funds exclusively for project construction and development.

At the meeting, representatives of homebuyers and consumers flagged delay in completion of promised amenities and non-adherence to the approved layout plan even in projects that started after the enactment of RERA, which was brought by the Centre to streamline the sector and ensure timely project delivery. They also highlighted the lack of uniformity in Rules notified by state govts and the failure of state RERAs to enforce their orders.

A representative of flat owners’ association pointed to the fact that a parent company remains legally unaffected despite its subsidiary company developing a project going insolvent. Acknowledging this, Khattar said, “there should be clarity on where responsibility should lie”.

Raising the issue of project de-registration, the Haryana RERA chief noted that some developers have neither started work nor complied with audit requirements despite registration taking place long ago. He stressed that it is essential to examine how such cases should be addressed under Section 8 of RERA, which deals with de-registration.

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