Homebuyers’ pan-India body, the Forum for People’s Collective Efforts (FPCE), has sought relief from Prime Minister Narendra Modi for homebuyers impacted by various extensions provided to developers that led to additional interest burden for home-owners.
In the backdrop of Covid-19 related job losses and salary cuts, homebuyers are already stressed financially and the government hasn’t provided any relief in their instalments for the period of extensions granted to builders, according to FPCE.
The government has advised all RERA authorities to extend project completion timelines by 6 months with additional 3 months at state’s discretion.
While the Reserve Bank of India has granted a total 6 months’ moratorium for all term loans, the borrower is expected to pay additional interest for this period.
“This would only add to the burden of rent, EMIs, loss of compensation, delay, and now interest on suffering home buyers. In contrast, the builders would get a free hand to delay the project by 6 to 9 months more, without any liability of penalty, interest, compensation as envisaged under RERA, all through an illegal order,” FPCE said in its letter to the Prime Minister.
The body has objected to regulatory authorities offering indiscriminate extension to projects without following legal requirements that stipulates an extension can be given only when there is no default by developers and as ‘force majeure’.
“It is easily forgotten that every extension comes with added burden of EMI, rent, mental agony, harassment and shattered dream of having a own home by buyers and their families,” said FPCE’s General Secretary MS Shankar while demanding that for all the extensions, EMI burden should be passed on to builders.
FPCE expects the benefit of interest reduction to be automatically passed on by the banks to all home loans, without any application.
Most banks are not passing this benefit when the rates are lowered but when rates move up, they increase homebuyers’ obligations automatically.
“It’s high time that the government gives importance to views of the biggest stakeholders and demand creators—the homebuyers. It would help revive the sector and not merely cater to builders’ demands that has not yielded any desired results,” said Abhay Upadhyay, President, FPCE.
The body has sought that the ministry holds regular Central Advisory Council (CAC) meetings to address the issues faced by all stakeholders, and not only convene emergency meetings for builders alone.