About 450 real estate projects are facing insolvency proceedings

NEW DELHI: Representing 12500 members, 21 state and 204 city level chapters, CREDAI, whole heartedly supported the government in its endeavour to develop a roadmap for accelerated development of the sector, at the first ever National RERA Conclave, organised by Uttar Pradesh Real Estate Regulatory Authority (U.P. RERA) along with Government of India and Government of Uttar Pradesh.

The Conclave created a platform for property developers, buyers, regulatory authority and other stakeholders to come together and focus on strengthening the legal framework of RERA and growth of the real estate sector.

The first ever two day conclave focused on crucial aspects of the real estate sector including present day issues, growth strategies for revival of the sector, and above all means to strengthen the RERA as a one stop solution for all Real Estate matters.

Speaking at the conclave, Jaxay Shah, Chairman, CREDAI National lauded RERA on its efforts to institutionalize and organize the real estate sector: “We congratulate RERA and its members for all the tireless work which has gone into strengthening and enabling the real estate sector. With the current economic slowdown and issues like liquidity crunch and rise in insolvent projects due to unregularized cases in NCLT, it is pivotal for the industry to stand together and address the concerns and look for solutions.”

Satish Magar, President, CREDAI National, said “We are thankful to UP RERA and Government of India and Government of Uttar Pradesh for providing the real estate stakeholders a platform to address the challenges faced by the sector at present. About 450 real estate companies/projects across the country are facing insolvency proceedings under the Insolvency and Bankruptcy Code, which is creating a distress situation amongst the sector. The need of the hour is to bring in amendments making RERA the first forum for complaints.”

He has further recommended the following steps which are necessary keeping in mind the current scenario in the sector:

· At present, due to factors like deceleration in demand owing to lower GDP growth and liquidity crunch faced by developer is also affecting healthy projects, the sector is triggering a vicious cycle of distress. In order to revive the sector, it is essential to introduce onetime restructuring of loans for all long term viable projects, without further delay.

· Amendment of RERA Act to make it the exclusive legal forum for real estate complaints: By giving supremacy to the IBC over RERA Act, the very intention of the legislature enactment of the RERA Act has been defeated. RERA can be empowered, i.e. in any case any allottee being a financial creditor, has any issue with the real estate developer, and the first remedy available should be RERA.

Real estate sector is the largest employer after agriculture in India and accounts for 8 per cent in India’s overall GDP. The sector is expected to grow at a swift pace, contributing $1 trillion to the GDP by 2030, where participation of private sector is pivotal. The role of RERA and real estate will be paramount in achieving “Housing for All” by 2022.

While each real estate project takes about 60 to 100 approvals and involvement of various stakeholders like architect, engineer, contractor, the credibility in front of RERA is of real estate developer. CREDAI requested RERA to treat developers in a decriminalized and fair manner, creating an environment of trust and confidence.

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