The (UP-RERA) Uttar Pradesh Real Estate Regulatory Authority, which includes the real estate micro-markets like Noida, Greater Noida, Ghaziabad, etc., has taken punitive action against one of the eminent real estate developers. The Ansal API developer has failed to deliver the housing project on time, leaving homebuyers’ dream hanging.
For those who are not aware of RERA, it is an Act of the Parliament of India enacted to protect homebuyers‘ interest and help uplift the realty sector. The Upper House of Parliament, Rajya Sabha, passed the RERA bill on March 10, 2016, followed by Lok Sabha on March 15, 2016. After getting a thumbs up from both the Parliament houses, the Real Estate (Regulation and Development) Act finally came into existence on May 1, 2016.
The UP-RERA is taking some significant steps to ensure compliance. In its recent announcement, the UP-RERA has decided to deregister two Ansal API projects, i.e., Sector-P and Sector-J Pocket-2, Ansal API situated in Sushant Golf City, Lucknow under Section 7 of the RERA Act and keeping other four under observation.
The deregistration process of two API projects will commence after consultation with the state government. This decision has been made after the company could not provide the Authority with a satisfactory answer to the UP-RERA deregistration notice.
Statements by UP-RERA
“Deregistration order was served based upon the information collected, site inspections made, complaints registered in RERA, and non-compliance of the provision of the RERA Act. While the Authority had already given strict warnings, this decision was taken after giving them ample time to respond after issuing repeated notices. This step should be seen as a warning to others”, said Rajive Kumar, chairman, UP-RERA.
RERA, which ensures transparency in projects and provides the prospective homebuyer with detailed information about the builder, has found many irregularities in the finances and funds amounting to Rs 606. “A massive number of complaints by the allottees of the project including non-possession of the units, non-refund of the amount deposited by the allottees, violation of the terms and conditions of the sales contract/allotment letter, among others,” said UP-RERA in a statement.
Further to this, the Authority has strictly instructed the API Group to complete the remaining development work of two of his projects, which are Sector-A and Pocket-3; and upload the completion certificate by March 20. “For its Pocket 3 project, the promoter has been ordered to deposit a sum of Rs 9.4 crore in a separate account of the project in respect of the funds received from the allottees within three months to complete the other projects registered. The Ansal API Group has also been charged with a penalty of Rs 1.6 crore lakh, which is 5% of the total cost of the project,” the statement added.
During its forensic audit, the developer breaches RERA compliance in managing accounts and the half-yearly project account audit in its three projects. Instead of delivering the projects phase-wise, the developer expanded hugely, which led to mismanagement of funds and land.
UP-RERA Chairperson Rajive Kumar said, “a large parcel of land in phase-1 and phase-2 is mortgaged to various banks through the process of equitable mortgage. Repayment of the availed loan has posed a challenge in project completion. We also found out that there was surplus money in the project, which should have been utilized towards project completion”.
“Various complaints have been made against the promoter for the mismanagement, and in some instances, the Ansal API does not have the project land. He made allotment to them without having the required land and gross negligence on them,” complainants said in a statement.