Covid impact on real estate in India
The Coronavirus (COVID-19) has affected everyone. Its effects are now being felt in the economy, automobiles, manufacturing, and more.
In the wake of COVID-19, the Government has already announced Rs.20 lakh crore packages. The RBI has also announced the extension of the loan moratorium to 31 August 2020. It has also slashed the repo rate twice to make loans affordable.
The Maharashtra Real Estate Regulatory Authority (MahaRERA) has come up with the force majeure. It now offers a COVID-19 harmed period from 15 March to 14 September 2020. Force majeure is a provision that offers short-term relief to a party from performing its sure-shot duties while under a contract. It is being seen as a nice move to ease Covid impact on real estate.
The Pandemic has seen laborers reverse their migration to their hometowns, breaking the supply chain of construction materials. Hence, it is severely affecting the pace of real estate activities in Maharashtra and elsewhere.
MahaRERA has created this facility as the state has 25,000+ registered real estate projects, the highest number in India.
Under sections of MahaRERA, any registration of sale agreement due after 6 months can be extended beyond the period of Majeure.
Also, the possession date, as mentioned in the agreement, will be extended until this period is over.
Homebuyers can also demand any refund but after 1-month post the completion of the moratorium period.
While it is good news for realtors, Mumbai Grahak Panchayat has expressed concerns about safeguarding homeowners’ interests.
“It’s dubious if the interest of this force majeure is being given to realtors whose projects are already delayed. What if the builder is unable to give possession even after 1-month post this moratorium period is over. In such cases, homebuyers must not be denied interest in the ongoing lockdown period.” Shirish Deshpande, the Chairperson of the Mumbai Grahak Panchayat, was quoted as saying on the development.
Shirish went on to state that MahaRERA has a duty to ensure that real estate does not take undue advantage of this relief. He also questioned the shield MahaRERA gives to homebuyers who are suffering from paying EMIs.
Deshpande also stated that realtors are not obliging. This is because many have stopped paying rent to rehabilitation members. He wanted MahaRERA to clarify this so that the interests of the homebuyers were also protected.
Advocate Naheed Carrimjee also shared his opinion on MahaRERA’s announcement of this resort. Here is what he has to say about the measures taken to ease COVID-19’s impact on real estate. “This (force majeure) may be in favor of both homebuyers and developers. But that should not be taken as an excuse by builders to delay rents to tenants in redevelopment projects.”
The ball is now in MahaRERA’s court. It should safeguard the interests of both parties in this unprecedented situation due to the Pandemic.
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