The housing society launched in 2008 has become the first real estate project to be completed under the rehabilitation clause (Section 8) of UP-Rera, which allows the regulator to take up an unfinished project and guide it to completion under its watch.
Kalypso Court, which has around 900 flats across its 15 towers, is a small part of Wish Town, the Japyee township in Sector 128 where more than 20,000 homebuyers await the resolution of a lengthy insolvency process before they can hope to see their flats and houses completed. Since Jaiprakash Associates Limited (JAL) is the promoter of Kalypso Court, it is not in the ambit of insolvency proceedings, which involve JAL group company Jaypee Infratech Ltd.
Under UP-Rera’s watch, four of Kalypso Court’s incomplete towers – 7 & 8, 11 & 12 – were taken up for completion. The Noida Authority has issued occupancy certificates (OC) for towers 7 and 8, where 148 homes can now be delivered to buyers. Officials said the OCs for towers 11 and 12 are expected within a month. These towers have 126 flats.
“This is a big day for the entire real estate sector as the Rera Act was enacted on the backdrop of massive delays in completion of real estate projects and the need for safeguarding interests of homebuyers,” said UP-Rera chairperson Rajive Kumar.
In NCR, which has some of the country’s most vexed real estate problems, Rera has so far tasted limited success with most of the big battles being fought outside the regulator’s ambit. Jaypee, Amrapali and Unitech are at the Supreme Court while Many projects have been dragged to NCLT, the bankruptcy court.
Kumar said he believed the Section 8 provision of Rera is a gamechanger. “The effective use of provisions of Rera in enabling completion of stalled real estate projects is proving to be a gamechanger. Perhaps, Jaypee Greens Kalypso Court project is the first project not only in the state but also in the country to have been completed using Section 8,” he said.
Kalypso Court’s apartments were to be handed over within 39 months of launch. By 2016, seven towers of the project had been completed and handed over. After Rera’s inception that year, eight towers were registered with the regulator, four of which were delivered in subsequent years. But the four others stalled.
In July 2020, UP-Rera approved a completion plan for the four towers after a detailed analysis. It had been approached by a group of homebuyers. “It is to the credit of Jaypee Greens Kalypso Court homebuyer association – Progressive Welfare Society – which was formed in 2020 that it pursued the matter with the developer and UP-Rera. We ensured completion of the project. We are happy our perseverance paid off,” said Jayesh Patel, president of the association.
Officials said at the time stakeholders approached UP-Rera, the cost to complete unfinished work stood at Rs 134 crore. The amount due with homebuyers was Rs 90 crore and the value of unsold inventory was estimated to be Rs 25 crore. With an escrow account set up for completion, the promoter deposited Rs 45 crore over a period of time. When homebuyers gained confidence, they too agreed to pay their instalments on time, enabling the project to overcome the financial constraints that had stalled it.
Ajit Kumar, adviser to the Jaypee group, said, “We managed to get OCs for four towers after UP-Rera came into existence in 2016 but work on the remaining four was stalled because those were the times when real estate sector nosedived. But our intentions were clear and when the allottees association approached us for completion of the project under Section 8, we cooperated and took up the work and got it completed in 18 months flat.”
Section-8 of the Rera Act can be invoked if the original developer, with written consent of more than 50% homebuyers, approaches the regulator with a rehabilitation plan. UP-Rera’s project management division has to subsequently conduct a spot survey of the project to verify the efficacy of the rehabilitation plan. Once it’s cleared, project advisory and monitoring committees oversee completion in line with the regulator’s plan.
Ishtiyaque Ahmad, chief architect and town planner (CATP), Noida, said, “The developer Jaiprakash Associates Limited applied for OC for two towers, 7 and 8, in December last year and the Noida Authority has issued OC after due inspection. As for OC for the remaining two towers, the developer applied in May. Our inspection is almost complete and within a month, we will issue that as well.”