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Real Estate Projects : Extension of all Approvals and Extension & Moratorium under RERA

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ADVISORY FOR EXTENSION OF VALIDITY AND TIME LIMIT OF ALL APPROVALS, NOCS AND SUBSEQUENT COMPLIANCES GIVEN BY STATE AND CENTRAL AGENCIES FOR REAL ESTATE SECTOR UNDER NOTIFICATION NO. K-14011/12/2020-AMRUT-IIA DATED 28TH MAY 2020 ISSUED BY THE GOVERNMENT OF INDIA

The Ministry of Housing and Urban Affairs (MoHUA) after examining the views of States and NOC issuing agencies and various representations from stakeholders, has on 28th May, 2020 discussed the impact of outbreak of Covid-19 on real estate projects and  issued an advisory to Urban Local Bodies/Urban Development Authorities/ other State/ Central Government agencies, States/concerned agencies to:

  1. Consider the situation as a ‘Force Majeure’.
  2. Extend the validity automatically, of various kinds of approvals by Urban Local Bodies (ULBs)/ Urban Development Authorities/ other State agencies including Commencement/ completion certificates, payment schedule of charges including developmental charges, ‘No Objection Certificates’ from various agencies by 9 months.
  3. Extend timelines for subsequent compliances by the building proponents as per the precondition of the permission given, automatically, for a period of 9 months.

In line with promoting Ease of Doing Business MoHUA has advised the States to issue necessary directives to Municipal Corporations/ Urban Development Authorities/ ULBs so that (i) various approvals, payment of charges and compliances by building proponents may be rescheduled without any requirement of individual application from building proponent in this regard; and (ii)in all real estate projects, the validity of various kinds of statutory approvals, licenses, registration,  building plan approvals and NOCs by Urban Local Bodies (ULBs)/ Urban Development Authorities/ other State agencies expiring on or after 25 March, 2020 stand extended  automatically by 9 months.

This benefit is applicable to all expirable clearances/NOCs, issued by various Departments including but not limited to  NOC for extension of time from  Lessor/ Land owning agency for construction and issue of building permit, Layout plan approvals, Building plan approvals, Commencement Certificate/ Plinth inspection certificate, Excavation permission, Environment clearance, Defence NOCs, Railway Related NOCs, payment schedule of charges including developmental charges, from various agencies like MCGM, MMRDA, MHADA, MIDC, CIDCO, SRA, etc.

SUMMARY OF NOTIFICATION NO. 14/2020 DATED 18th MAY 2020 ISSUED BY THE MAHARASHTRA REAL ESTATE REGULATORY AUTHORITY (“MAHARERA”) INVOKING FORCE MAJEURE FOR COVID-19 PANDEMIC

The Notification takes into consideration advisory issued by Ministry of Housing and Urban Affairs (MoHUA)  on 13th May 2020 regarding extension of registration of real estate projects and concurrently extending timelines of all Statutory Compliances, due to ‘Force Majeure’ under the provisions of Real Estate (Regulation and Development) Act, 2016 (RERA) in view of  the  COVID-19 (Corona Virus) Pandemic and consequent nation-wide lockdown with effect from 24thMarch, 2020, reverse migration of labourers to their native places and break in supply chain of construction material because of which the construction activities of real estate projects across the country have been severely impacted.

As per the advisory of MoHUA to all States/ Union Territories and their Real Estate Regulatory Authorities in exercise of the powers under section 37 read with Section 34(a), 34(f) and 34(g),so as to avoid submission of separate application for extension of each project and orders thereon, the following directions are issued for all projects governed by MahaRERA with immediate effect:

  1. Force Majeure PeriodA force majeure period of six months, from 15th March to 14th September, 2020 is being invoked.
  1. Validity of Project Registration and Revised Certificate
    • The validity of project registration for all projects where completion date, revised completion date or extended completion date expires on or after 15th March, 2020 is extended by  an aggregate period of 6 months(this includes 3 months extended by MahaRERA vide Order No. 13/2020).
    • At their discretion, MahaRera may consider further extension of the date of completion as per registration for another period up to 3 (three) months, if the situation in the State or any part thereof, for reasons to be recorded in writing, needs special consideration of invoking force majeure in view of current pandemic.
    • MahaRERA shall accordingly issue project registration certificates, with revised timelines for such projects, at the earliest.
  1. Further Extension
    • For further extension of validity of project registration beyond the aforesaid period of 6 months, for adversely affected projects, concerned promoters will have to apply in accordance with provisions of Section 6.
    • MahaRERA may at its discretion waive the fee for such extension due to force majeure in accordance with rule 7 of Maharashtra Real Estate Registration Rules, 2017.
  1. Extension of time for Statutory CompliancesThe time limits for quarterly compliances under Section 11, which become due anytime during force majeure period, stand automatically extended for a period till the expiry of force majeure period.
  1. Moratorium Period for Interest and Compensationfor Promoters and AllotteesThe Force Majeure period will be treated as a “moratorium period” for the purpose of calculating interest and compensation under section 12, 18 19(4) and 19(7) of the Act.
  1. Registration of Agreement for SaleAny registration of agreement for sale, which becomes due during the force majeure period under Section 13 of the Act, can be registered in a period extending till the expiry of force majeure period i.e on or before 14th September,2020.
  1. Revised date of CompletionThe dates of possession mentioned in already registered agreements for sale, shall be deemed to be extended by the force majeure period i.e 6 months.
  1. Transfer of Title – ConveyanceTherefore, any compliance under Section 17 that becomes due during the force majeure period is allowed to be completed within a period extending till the expiry of the force majeure period i.e on or before 14th September,2020. 
  1. Moratorium Period for Refund in case of cancellationAny refund, which under rule 19 of MahaRERA Rules becomes due during the force majeure period is allowed to be executed within a period extending up to one month after the expiry of the force majeure period i.e on or before 14th October, 2020.
  1. Arrears in payment of Interest, Penalty and CompensationAny Interest, Penalty, Compensation, which under Section 40 of the Act recoverable as Arrears of Land Revenue becomes payable during the force majeure period, shall be recovered after the expiry of the force majeure period.

Conclusion

  1. The above notification rightly denotes present pandemic of Covid-19 as “Force Majeure” and has  granted extension of Project validity and compliance timelines by six months to Promoters. Suo motu  extension will streamline the entire process and reduce multiple applications as well as litigations.
  2. The above notification has granted Promoters moratorium of six months for payment of interest and compensation to Allottees. Allottees shall also be entitled to moratorium of 6 months for payment of interest  on amounts due and payable to Promoter. This implies that payment of any installment due by the Allottee can be deferred by 6 months without the Allottee having to pay any interest on the delayed payment.
  3. Benefit of this Circular is not available to payments which were due prior to 15th March, 2020.

Compiled by
Sachin Karia, Senior Associate

Joyita Sabharwal, Founder Partner


Disclaimer
This article is for information purpose only and has been compiled purely on the basis of circulars and orders issued by government authorities from time to time and the same does not constitute our legal opinion or advice.

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