KOLHAPUR: The land developers and builders in the city on Wednesday demanded that the government should give them a grace period to pay interest if they fail to handover apartments or homes to the buyers within the stipulated time.
The Union government announced the draft rule for the Real Estate (Development and Regulation) Act, 2016 on Tuesday. As per the rules, the developers will have to to pay 11.2% interest to the buyers for delayed projects.
However, the rules have not gone down well with the builders, who have decided to take up the matter with the Union government in coming days. Meanwhile, they admitted that a builder should be asked to pay some amount if the project is delayed due to personal reasons.
There are a number of reasons due to which a project may get delayed. As per our observations, the common reasons such as delay in getting permission from civic authorities or other governmental agencies are beyond our control. We are not certain if a builder will be required to pay the interest if the project is delayed due to these reasons,” Mahesh Yadav, president of Kolhapur chapter of Confederation of Real Estate Developers Association (Credai), said.
In the limits of the Kolhapur Municipal Corporation (KMC) and its fringe areas, a residential project of around 35,000 sq ft construction area have 18 to 24 months of completion period, if everything goes as per builder’s schedule. However, in most of the cases, the project gets delay. “We would submit our objection to the rule and demand the government to allot grace period to pay the interest. The grace period to complete the project shall be decided by the mutual discussions between government agencies and builders’ community,” Yadav added.
Within the limits of KMC, including its fringe areas, around 3,500 flats are getting constructed annually. Out of these, nearly 1,500 are being handed over to the buyers. The annual business of city’s real estate is nearly Rs 450 crore, however, it is yet to pick up momentum, as claimed by the business community here.
“Under the present circumstances, we cannot accept the interest part of the proposed rules. Besides delay in acquiring permission from government agencies, there could be reasons like natural calamities which may delay a project. For instance, the constructions were stopped due to drought conditions in Pune. In Nashik, the construction were halted due to court orders. We have to be specific when the interest should be implemented,” Rajeev Parikh, vice-president of Credai, Maharashtra, said.
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