Apex real estate industry body CREDAI has recommended that RERA be made the exclusive legal forum for real estate complaints, and that viable projects be given the option of onetime loan restructuring. These proposals were made at the recently concluded National RERA Conclave held at Lucknow. The event was organised by Uttar Pradesh Real Estate Regulatory Authority (UP RERA) along with Government of India and Government of Uttar Pradesh.
According to CREDAI, which represents over 1,20,000 developers across the country, the following steps are necessary given the current scenario:
• At present, factors like a deceleration in demand owing to lower GDP growth and liquidity crunch faced by developers are affecting healthy projects. This is triggering a vicious cycle of distress. It is essential to introduce a onetime restructuring of loans for all long term viable projects, without further delay, to revive the real estate sector.
• The RERA Act should be amended suitably to make it the exclusive legal forum for real estate complaints. If an allottee, being a financial creditor, has an issue with the real estate developer, the first remedy should be RERA. By giving supremacy to the IBC over RERA Act, the very intention of the enactment of the RERA Act has been defeated.
Speaking at the conclave, CREDAI’s national chairman Jaxay Shah stated, “Amidst the economic slowdown and faced with issues like liquidity crunch and rise in insolvent projects due to unregularised cases in NCLT; it is pivotal for the industry to stand together and address the concerns and look for solutions.”
CREDAI president Satish Magar added, “We are thankful to UP RERA and Government of India and Government of Uttar Pradesh for providing the real estate stakeholders with a platform to address the challenges faced by the sector at present. About 450 real estate companies/projects across the country are facing insolvency proceedings under the Insolvency and Bankruptcy Code, which is creating a distress situation amongst the sector. The need of the hour is to bring in amendments making RERA the first forum for complaints.”
Representatives of the industry body explained that the real estate sector is expected to grow at a swift pace and contribute $1 trillion to the GDP by 2030. Also that the role of RERA and the real estate industry would be critical for achieving housing for all by 2022.