Relief was offered to real estate developers; Union Finance Minister Nirmala Sitharaman has asked states and Union territories to extend the registration and completion date by six months of all projects registered under the RERA. This action would be applied to all those estate project registrations expiring on or after 25th March and individual applications are not required.


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The finance Minister stated that the Covid-19 Pandemic should be considered as an event of ‘Force Majeure’ or as an ‘Act of God’ under the RERA Act. Consequently, the urban development ministry will issue an advisory to all states and UTs so the required authorities can invoke the ‘force majure’ clause.

This decision to treat COVID-19 as an event of ‘Force Majeure’ under section 6 of RERA and extension of registration and completion dates are proactive actions on the part of the government, and this is likely to help developers, especially in a situation when they are facing supply-chain disruption and shortage of labour. The developers will also be able to pass this same benefit to home buys by extending the payment schedule, who are facing pay cut/job less threats on account of the pandemic.The fresh project certification will be issued automatically and with revised timelines. Timelines will be extended for various statutory compliances under the RERA concurrently.

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This pandemic has stalled the constructions of thousands of real estate projects, putting a stop on home sales and creating cash flow problems for developers. The residential section was already reeling from prolonged slowdown and the lockdown has only deepened the crisis. Therefore, this move by the government will destress developers significantly, since construction actively had been halted all across the country. Home buyers wait for their homes will get extended by this action but it was only inevitable. Developers and investors said that liquidity infusion is needed to turn around the sector, which has been witnessing a slew of challenges.

Some of these projects are likely to be delayed by a period of at least 4 to 6 months, this is a welcome move by the government however it still does not answer the larger liquidity and cash flow related challenges faced by the developer.


The extension of deadline may also mean extra interest burden for home buyers as they will have to continue servicing their home loans for this extended period. Therefore, to conclude the government has basically legitimized the delay even if the delay has not been on account of COVID-19 pandemic. There is less clarity on the fact whether home buyers will be able to correspondingly delay their payments to developers. The home buyers are likely to continue to pay their EMIs and rent during this period.

On the other hand, the home buyers body forum for people’s collective has stated that Force Majure was not required. The extension of deadlines should have been limited to the lockdown period.

For case specific advice, please contact Punjab Haryana High Court Best/Expert Lawyers Advocates for Real Estate/Rera in Chandigarh Panchkula Mohali.

This post is written Ashwin Singh

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