CREDAI Urges UP RERA to Reconsider Occupancy Certificate Requirement

In a recent development that has stirred the real estate sector in Uttar Pradesh, particularly in Noida and Greater Noida, the UP Real Estate Regulatory Authority (UP RERA) has mandated that builders must obtain an occupancy certificate (OC) or completion certificate (CC) before handing over possession letters to homebuyers. This decision, announced on June 8, aims to curb the arbitrariness of promoters and resolve disputes between them and the flat buyers. However, this move has sparked concerns among various stakeholders, highlighting the challenges faced by homebuyers in projects that are delayed or stuck.

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Dinesh Gupta, Secretary of CREDAI Western Uttar Pradesh, expressed concerns over the directive's implications, especially for projects that are nearing completion but are yet to receive OCs from local authorities. Gupta emphasized that while the intention behind the directive is to protect homebuyers, its blanket application to both new and old projects could adversely affect those invested in long-delayed projects. He suggested that a distinction should have been made between new projects and those already mired in delays.

Local authorities in Noida and Greater Noida issue OCs, but numerous projects in these areas have been unable to secure these certificates due to various reasons, including outstanding dues from builders to the authorities. This situation has left many homebuyers in a predicament, as they juggle the financial burden of paying both EMIs and rent without being able to move into their purchased homes.

Reactions from Homebuyers' Associations

Abhishek Kumar, President of the Noida Extension Flat Owners Welfare Association (NEFOWA), criticized UP RERA's approach as lacking consideration for the ground realities faced by homebuyers in stuck projects. Kumar pointed out that for these buyers, particularly end-users as opposed to investors, the ruling compounds their financial woes by forcing them to pay both EMIs and rent simultaneously.

Despite acknowledging that the rule could serve as a significant step forward for new projects where transactions have been fully settled with authorities, Kumar argued that it fails to address the complexities surrounding delayed or incomplete projects due to issues with builders.

Clarifications and Provisions

In response to the concerns raised, UP RERA Chairman Sanjay Bhoosreddy clarified that the directive aims to eliminate confusion among allottees caused by promoters' use of misleading terms in possession offers. He highlighted that offers of possession should solely signify readiness for handover.

Furthermore, CREDAI office-bearers referenced a 2017 provision by UP RERA for a deemed OC, which allowed for possession in projects that had secured critical NOCs for fire safety, electricity, lifts, and finance. Suresh Garg, Vice President of CREDAI Western UP, noted that builders typically issue a final demand letter after obtaining an OC or deemed OC as per their agreement with buyers. Garg stressed the importance of clear communication from builders regarding possession dates to prevent confusion among homebuyers.

This ongoing debate underscores the need for a balanced approach that safeguards homebuyer interests without stalling the progress of real estate projects due to bureaucratic hurdles. As stakeholders navigate these regulations, the focus remains on finding solutions that address both consumer protection and project completion challenges.