The insolvency proceedings initiated by the National Company Law Tribunal against Jaypee Infratech have left thousands of homebuyers in the lurch. What should you do in such cases?
The insolvency proceedings initiated by the National Company Law Tribunal (NCLT) against NCR’s realty major Jaypee Infratech have not only left thousands of homebuyers in the lurch, but are also being viewed as a test case for the realty sector. And as if this was not enough, another developer – Amrapali Group – is likely to face insolvency proceedings by NCLT, according to media reports.
What is more worrisome is the fact that many more similar cases are likely to surface in the coming days and months as with the implementation of RERA in every state, screws will be tightened over more and more errant builders, and more and more banks would like insolvency proceedings to be initiated against them – as per the new insolvency and bankruptcy code – to recover their dues. This has left lakhs of homebuyers worried. After all, they have invested their life-long savings for buying a roof over their head and after years of wait are still not sure of getting the possession of their flats.
Their grouse is that despite sounding red alerts many times earlier, no one listened to their woes, including the state and Central government. However, all of a sudden, everyone seems to have woken from one’s slumber and wants to recover one’s dues as well as initiate insolvency proceedings against the developers. The problem is that instead of helping buyers, the focus of such proceedings seems to be on recovery of lenders’ dues and the interest of banks may get precedence over the interest of homebuyers.
Still, there is no need to panic. If you have also bought a flat in any such project and your flat has not been delivered yet or if you are planning to buy your dream home, then here are a few things you need to do in the current scenario:
Make your claim fast: Usually in such cases banks and buyers are given some time to make their claim. For instance, in the case of Jaypee Infratech, flat buyers – as well as banks which have given them home loans – along with other lenders and creditors have been given time till August 24 to make their claims. So, make your claims on time. If you fail to do so, then it may not be good for you. You may probably get another chance, but who knows?
Don’t panic: Another important thing to do is not to panic. Yes, your life-long savings are at stake. However, the entire nation is watching this case. Therefore, the builder must be given some time to revive the project. In the Jaypee case, for instance, the new CEO will be given a maximum of 270 days to revive the company. And it is also in the interest of the builders to do so because their future is at stake.
Don’t go only after reputed names: Earlier it was generally advised to buy a flat from a reputed developer. However, in view of the recent developments, you also need to check the track record of developers. If a developer has delayed any of his projects earlier, then there is no guarantee that he will not do so again.
Check all legal and clearance certificates: Don’t just believe what your developer says. Check all the legal and clearance certificates yourself and also get them verified with the local authorities. If the builder has made a fake certificate, then the truth will come out once you get it verified with the concerned authority. However, just don’t believe their words. Get it in writing from them.
Go for ready-to-move-in apartments or RERA-approved projects: Till the situation improves, it is in your own interest to go for ready-to-move-in apartments. Yes, they are a bit costlier than the under-construction projects, but they are relatively safe also. If you want to buy an under-construction flat, then you can buy one in any RERA-approved project as that will be more safe.