They want the government to waive off the interest part on the principal amount of the loan during this COVID-19 period.

an underconstruction buildingRepresentational image/PTI
news Controversy Friday, May 22, 2020 - 08:12

Home buyers in India have taken strong exception to the Union Ministry for Housing and Urban Affairs’s advisory to RERA (Real Estate Regulatory Authority) authorities across states to give builders a six-month extension to finish projects. This extension was suggested under force majeure – unforeseeable circumstances that prevent someone from fulfilling a contract – on account of the COVID-19 pandemic. And following this, various state RERAs have started issuing orders to the same effect.

Homebuyers say the decision is biased only to protect the interest of the real estate lobby, and fails to protect the interest of homebuyers; they also said that the decision was taken without the consultation of customers.

They said while force majeure benefit is extended to builders, in the same way, homebuyers also should be taken care of suitably. They demand that the government should waive off the interest part on the principal amount of the loan during this COVID-19 force majeure period. 

A Bengaluru-based home buyer, Suryakiran AS said, “This is a one-sided order to help builders. If project deadline can be extended in the name of COVID-19 which made builders lack funds or unavailability of labour, then who will compensate us for the delay in the project for which we need to pay extra penalty to banks? With longer delays, home loans will be converted to commercial loans with extra interests.”

MS Shankar, General Secretary of Forum for Peoples Collective Efforts, a member of the central advisory committee for RERA, said, “The home buyers are now facing pay cuts, unsecured jobs, over and above the rent.” 

The association said that they will approach Prime MInister Narendra Modi with various demands to protect home buyers’ interests.  

He said. “While national lockdown is announced effective March 25, 2020 and extended till May 31, 2020, the Government of India, has relaxed the lockdown condition effective April 22, 2020 with a view to revive the economy, and allowed construction activities to resume in those projects where labourers are available.”

“With this ease of relaxation of lockdown conditions which keeps coming every day or other, we are of the opinion that this COVID-19 impact, perhaps need not be considered as force majeure and the construction activities can be caught up by the builders,” he added. 

They argued that COVID-19 be acknowledged as a natural calamity under Force Majeure and extension of RERA Registered projects, as per section 6 of the RERA Act applicable only for actual lockdown period, without leaving it to the adjudication or to the discretionary power of the authority as per Section 6 of the Act.