Indian realty market is holding around 5.6lakh of delayed housing units in today’s date. Total value of the delayed units is estimated to be around Rs. 451,750Crore as per the ANAROCK Property Consultants data. All the projects that are facing delay in possession or even completion of the units were launched in 2013 or before. Not to mention, many of the real estate properties of Delhi-NCR are amongst the same.
Around 5.6lakh homebuyers across India are still awaiting the delivery of their homes for which they have been paid or still paying EMIs but builders continue to claim their bankruptcy status to the banks and government. The situation is now that builder will be able to complete the construction work only upon getting funds from buyers while buyers have already given the funds and now waiting for the completion.
The incomplete projects are getting piled up for over year and year and so, causing the main reason of cost overruns compounding the funding crisis even further. Another big reason for the incompletion lies in that fact that many builders, without taking mandatory approvals from the authority, launched green field projects whose works were stopped at the mid-stage.
RERA launch in year 2017 brought some relief to the homebuyers. Government has safeguarded the homebuyers along with the banks and other creditors with amendments in Insolvency and Bankruptcy Code. With this, the state authorities get complete right to intervene with the projects towards completion in order to protect the investment of homebuyers when builders claim their bankruptcy status.
Along with monitoring the proper funds management by the builders, the government can also bring in third party – government or non-government to lead the project to the completion if the construction work of the project is found halt for any reason. In other words, it will be government’s responsibility to ensure the completion of projects by the builders or any third party. Nevertheless, the cases of insolvency are still pending for the projects launched in 2012-13 at present and homebuyers are still waiting for the possession of their homes.