No New Projects if Old Ones Pending: Haryana-Rera

No New Projects if Old Ones Pending: Haryana-Rera

The Gurugram bench of Haryana Rera on Friday issued a notice to blacklist and debar a real estate company, Empire Realtech, and its promoter CHD Developers from launching any new project till ongoing ones are completed. It’s the first time the regulator has taken such a tough measure as delays in delivery of homes have turned into a chronic problem both in the city and other parts of NCR’s struggling but massive real estate sector.

CHD Developers had launched a housing project under Empire Realtech in 2011 – 106, Golf Avenue in Sector 106 – with a promise to offer possession by December 2016. The homes have, however, not been delivered yet. The promoter intimated the revised date for completion to H-Rera as June 30, 2021 at the time of registration in 2016. “But keeping in view the present situation of funds and stage of construction, there is every likelihood of further delay of the project,” observed the bench comprising chairman KK Khandelwal and members SC Kush and Samir Kumar while deciding to issue a notice asking why the company should not be blacklisted and debarred from launching new projects till it completes existing ones.

“The quarterly progress reports have not been submitted by the developers (as required under Rera rules) either,” Khandelwal said. The notice asks why penal proceedings should not be initiated and a penalty that may be up to 5% (Rs 28 crore) of the project cost should not be imposed. “The promoter has been asked to submit a mitigation plan for completion of the project within a month in consultation with the association of allottees. The authority has also given an option to the association of allottees on taking over the project for its completion,” Khandelwal added.

There are 642 units in the project, of which 600 have been sold. Nearly Rs 500 crore has been collected from homebuyers. The promoter has also taken a loan of Rs 150 crore, of which Rs 36 crore is outstanding. The bench said since the promoter had not opened a separate Rera account for the project, instalments paid by homebuyers were received in the bank’s escrow account, and the money deposited in the account was taken away by the lender against the loan. Consequently, there were no funds left for construction.

The bench said 70% of the homebuyers’ money should have been deposited in a separate Rera account to be used only for construction. “This is a clear violation of Section 4 of the Rera Act and warrants penal proceedings under Section 60 of the Act against the promoter,” the bench said.

Construction stopped in October 2018. Most of the allottees have already paid 90% of the cost of the apartments. “It seems that the promoter has siphoned off funds as even after receiving more than Rs 600 crore from the allottees and lending institutions, only Rs 168 crore has been spent on construction,” the bench noted. It ordered a forensic audit to probe what had happened to the funds.

The allottees’ association has, meanwhile, suggested taking over the project and completing it. The regulator is examining that proposal. The promoter has been asked to infuse funds for the completion of the project, which is estimated to be Rs 104 crore. The other incomplete projects of the developer include CHD Van Group Housing in gurgaon (10 acres) and CHD Rosertico (10 acres).

Source : TOI

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