The World Health Organization (WHO) on 11th March, 2020 labelled the outbreak of Novel Corona virus – COVID-19, a ‘Pandemic’ and called upon the Governments of all the countries to change the course of the outbreak by taking “urgent and aggressive action”. Globally, Countries and their respective Governments are struggling to cope with the health and financial crisis caused by the rapid spread and outbreak of Novel Corona virus. Indian Government announced a complete lockdown of the entire nation for 21 days beginning from 24th March, 2020 to 14th April, 2020 which has now been further extended for 19 days i.e. upto 3rd May, 2020.
In view of the lockdown, the Reserve Bank of India (“RBI“) on 27th March, 2020 announced the COVID-19 package with an intention to bring relief to the ailing financial sector. The real estate sector has been impacted as well with the tightened restrictions and the construction work of all the real estate projects has been severely affected in the manner that the partial workforce has been unable to attend work or construction sites as the labour work force may have migrated back to their respective home states. Further, there is disturbed supply chain in obtaining construction materials as the same has been disrupted. The RBI having recognized the same has allowed all banks to provide a 3 (three) months moratorium period for fixed term loans and EMI payments.
The Maharashtra Real Estate Regulatory Authority (“Authority“) has issued an Order No.13/2020 on 2nd April, 2020 announcing the revision of real estate project registration, validity and extended the timeline for statutory compliances in view of the pandemic , the lockdown and its impact to ensure the compliance of obligations cast upon the promoters, allottees and the real estate agents.
The Order states that all the MahaRERA Registered Projects where completion date, revised completion date or extended completion date expires on or after 15th March, 2020, the period of validity thereof for registration of such projects shall be extended by 3 (three) months. The Authority has taken into consideration the reasons set out in the provisions of Section 5, 6, 7(3) of the Real Estate (Regulation and Development) Act, 2016 (“Act“) or Rule 4(2) of the Maharashtra Real Estate (Regulation and Development) (Registration of Real Estate Projects, Registration of Real Estate Agents, Rates of Interest and Disclosure on Website) Rules, 2017 to be read with Section 34(f) of the Act. The aforesaid provisions deal with the grant of registration, extension of registration and revocation of registration of the real estate projects.
The Order further states that the Project Registration Certificates with revised timelines for such Projects shall be issued at the earliest.
The timeline for the statutory compliances in accordance with the provisions of the Act and the Rules and Regulations made thereunder have been extended. The time limit for statutory compliances which were/are due in the month of March/April/May have been further extended upto 30th June, 2020.
The RBI on one hand has ensured a relief to the borrowers by allowing the banks to provide a 3 (three) months moratorium period for fixed term loans and EMI payments, while the step taken by the Authority on the other hand can be viewed as a relief to the promoters of the real estate projects to ensure the compliance of obligations cast upon them as in these reasonable circumstances the regular development of the real estate project is subject to delay for no default on the part of the promoters.
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