18 - 04 - 2020

CREDAI Bengal Daily News Update | 18.04.20

RBI's additional liquidity measures to provide relief to real estate

The central bank’s decision to reduce reverse repo rate by 25 basis point and additional

liquidity for the National Housing Bank (NHB) will also accelerate and facilitate bank

credit flows towards to the beleaguered sector in the wake of Covid19 crisis.

The Reserve Bank of India’s additional measures to support the economy including one-year

extension for commencement of commercial operations (DCCO) of project loans for real

estate projects that are delayed for reasons beyond the control of promoters are expected to

provide relief to real estate sector.

The central bank’s decision to reduce reverse repo rate by 25 basis point and additional liquidity

for the National Housing Bank (NHB) will also accelerate and facilitate bank credit flows

towards to the beleaguered sector in the wake of Covid19 crisis.

Realty developers expect the RBI’s measures to provide the liquidity boost to the realty sector

and ease the impact of business interruption caused by the global pandemic.

“One year’s extension of DCCO will provide relief to non-banking finance companies (NBFCs)

and housing finance companies (HFCs) and to the sector at large. We are hopeful that the

government will soon aid the sector with the announcement of the much needed economic

package,” said Jaxay Shah, National Chairman of realty developers’ body CREDAI.

Following the central bank’s move to cut reverse repo rate by 25 basis points, it now stands at

3.75% and will enable banks to lend more.

“The RBI announcement today is constructive, commendable and is in favour to support the

financial system and at the same time the Indian real estate sector... This comes as a big relief to

borrowers and lenders,” said Deo Shankar Tripathi, MD & CEO of Aadhar Housing Finance.

According to him, prevailing confusion on asset classification of loans has been put to an end

with the announcement. With this, standard classification status of loans as of 1st March will

exclude the 90 days moratorium period from 1st March to 31st May, which means status of

loans shall remain at a standstill till 31st May.

The central bank also added that it is monitoring the situation very closely and will continue to

make changes as and when required.

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Newspaper/Online ET Realty (Online)

Date April 17, 2020

Link https://realty.economictimes.indiatimes.com/news/industry/rbis-additional-

liquidity-measures-to-provide-relief-to-real-estate/75196666

Govt to consider demand of one-time restructuring of developers’

loan: Hardeep Singh Puri

The minister was addressing a video conference organised by industry body Naredco.

Housing and Urban Affairs Secretary Durga Shanker Mishra also joined the webinar.

Housing and Urban Affairs Minister Hardeep Singh Puri on Friday assured builders that his

ministry will consider the demand of one-time restructuring of developers’ loan and also find a

solution to facilitate digital transactions in purchase of properties and loan disbursements.

The minister was addressing a video conference organised by industry body Naredco. Housing

and Urban Affairs Secretary Durga Shanker Mishra also joined the webinar.

Stating that the real estate and construction sector was important for the country’s economic

growth and job creation, Puri asked the association to send its recommendation for dealing with

the crisis caused by the coronavirus pandemic.

During the conference, HDFC MD Renu Sood Karnad pointed out that the company was

sanctioning loans during the current lockdown period but the same could not be disbursed due

to lack of digital signatures. She urged the government to allow digital signatures for property

registration and loan agreements.

She also demanded one-time restructuring of loans to the cash-starved real estate industry,

which will enable developers to access last mile funding from financial institutions.

Responding to her query, Puri agreed that there could be difficulty in closing the real estate and

mortgage transactions and said “we will find a solution”.

“In the COVID-19 time, clearly digital signature is a requirement,” the minister said.

On the one-time restructuring of builders’ loan, Puri said, “that is occupying a lot of attention.

We need to find intelligent and innovative ways to do things. Send us a little note on it”.

“We will address both these issues,” the minister said.

The housing secretary said the ministry will prepare a protocol with the Department of

Financial Services for digital transactions. He suggested Aadhaar could be used instead of

digital signatures, as it was being done in the government departments.

Newspaper/Online Financial(Online)

Date April 17, 2020

Link https://www.financialexpress.com/industry/govt-to-consider-demand-of-one-time-

restructuring-of-developers-loan-hardeep-singh-puri/1931890/

The issue of one time loan restructuring was not only for the real estate sector but many

industries, he added.

Regarding demand of an extension of project completion time under the RERA Act, Mishra

said the ministry would consult all stakeholders, including regulators, and take a final decision

in the next one week.

Real estate developers also demanded reduction in GST, waiver of stamp duties and other

incentives to help the sector.

Tata Realty & Infrastructure MD and CEO Sanjay Dutt said there should be no GST on joint

development agreements between the real estate developers to build a project. ____________________________________________________________________________________

Construction can't be allowed on open space in approved building

layouts: SC

As per the approved layout plan for JVPD scheme, two different plots of 2,500 and

1,687.18 sq yards were shown as open spaces/garden in the approved layout of 1967

situated on 9th Wireless Road, JVPD Scheme, Juhu.

The Supreme Court Friday said open spaces left for garden areas in approved building layout

plans cannot be allowed for construction, and upheld a Bombay High Court verdict disallowing

constriction on two plots at Juhu in Mumbai that were earmarked as open area by a government

body in 1967.

A bench of Mohan M Shantanagoudar and R Subhash Reddy said, "As rightly held by the High

Court, we are also of the view that the two plots, which are shown as open spaces/garden, in the

approved layout, cannot be allowed to be used for the purpose of construction."

Dismissing the appeals filed by Anjuman E Shiate Ali and others against the high court verdict

of July 19, 2017, the bench said: "It is fairly well settled that in an approved layout, the open

spaces which are left, are to be continued in that manner alone and no construction can be

permitted in such open spaces."

As per the approved layout plan for JVPD scheme, two different plots of 2,500 and 1,687.18 sq

yards were shown as open spaces/garden in the approved layout of 1967 situated on 9th

Wireless Road, JVPD Scheme, Juhu.

The apex court was faced with the question whether the plots, earmarked as open space in 1967,

can be allowed to be utilised for constructions in view of the subsequent development plan

prepared by MHADA (Maharashtra Housing and Area Development Authority) in 1999. It held

that the subsequent plan will not come into effect.

Erstwhile Maharashtra Housing Board (MHB), now known as MHADA, had framed a scheme

covering total land area of 5,80,000 square yards under Bombay Housing Board Act, 1948 and

the said Scheme was called as JVPD Scheme.

Under the scheme, Dawoodi Bohra Community were allotted certain plots for constructions of

residential units and in the lay out plan, the two plot were shown as open spaces/garden.

By using subsequent MHADA approval of 1999, the efforts were made to construct residential

units.

Newspaper/Online ET Realty (Online)

Date April 17, 2020

Link https://realty.economictimes.indiatimes.com/news/regulatory/construction-cant-be-

allowed-on-open-space-in-approved-building-layouts-sc/75206498

Dealing with two PILs, the high court had referred to the provisions of Development Control

Rules (DCRs), and the provisions of Municipal Corporation Act, and had held that these two

plots were shown as reserved for garden purpose in the approved layout in 1967, and cannot be

used for constructions.

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Maharashtra asks landlords to give tenants rent breather

In a circular issued on Friday, Additional Chief Secretary (Housing Department) Sanjay

Kumar also asked landlords not to drive tenants out of their homes if they fail to pay rents

during the current period.

The Maharashtra housing department has asked landlords to postpone rent recovery

from tenants for at least three months due to the lockdown for the coronavirus outbreak.

In a circular issued on Friday, Additional Chief Secretary (Housing Department) Sanjay Kumar

also asked landlords not to drive tenants out of their homes if they fail to pay rents during the

current period.

The official noted financial transactions have not been taking place across markets and factories

due to the lockdown, and the this had a bearing on income and employment of people.

"Several people are faced with difficult financial situations. Large number of people are not

able to pay their regular rents. Hence, rent recovery should be postponed for at least three

months and no tenant be driven out for non-payment of rent," Kumar said in the circular.

________________________________________________________________

Newspaper/Online ET Realty (Online)

Date April 17, 2020

Link https://realty.economictimes.indiatimes.com/news/residential/maharashtra-asks-

landlords-to-give-tenants-rent-breather/75206628

NBFC loans to delayed commercial realty projects can be extended

by 1 year

Announcing a slew of liquidity and regulatory easing steps on Friday, RBI Governor

Shaktikanta Das said that the extension can be made without treating the process as

restructuring.

Non-banking finance companies (NBFCs) can extend the date for commencement

for commercial operations (DCCO) by a year, in the case of loans provided to commercial real

estate projects which have been delayed for reason beyond the control of promoters.

Announcing a slew of liquidity and regulatory easing steps on

Friday, RBI Governor Shaktikanta Das said that the extension can be made without treating the

process as restructuring.

Das noted that the move will bring relief both to the NBFCs and developers,

"The date for commencement for commercial operations (DCCO) in respect of loans to

commercial real estate projects delayed for reasons beyond the control of promoters can be

extended by an additional one year, over and above the one-year extension permitted in normal

course, without treating the same as restructuring. It has now been decided to extend a similar

treatment to loans given by NBFCs to commercial real estate," he said.

Sector experts have applauded the move and have described it as a "much needed" relief.

"This is indeed a big move and will bring much-needed relief to cash-starved developers. It will

help in easing out time for maintaining and managing cash flows for these developers," Anuj

Puri, Chairman of Anarock Property Consultants.

Piyush Gupta, Managing Director, Capital Markets at Colliers International India said that the

decision will help developers in management of cash flow and curb stressed assets in the realty

sector.

"There have been specific mention of lending to Real Estate Sector by NBFCs which reflects

increased focus of the regulator on this sector. Developers now have additional one year to

repay lenders which is over and above one year available so this will help management of cash

flows and reduce asset classification stress of Real Estate focused NBFCs," Gupta said.

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Newspaper/Online ET Realty (Online)

Date April 17, 2020

Link https://realty.economictimes.indiatimes.com/news/commercial/nbfc-loans-to-

delayed-commercial-realty-projects-can-be-extended-by-1-year/75196625

Karnataka to regularise over 35 lakh unauthorised buildings

Chief Minister B S Yediyurappa on Friday chaired a meeting of ministers and officials to

review the Akrama- Sakrama scheme.

With a plan to regularise over 35 lakh unauthorised buildings in the state under the Akrama-

Sakrama scheme, the Karnataka government on Friday said it has decided to re-frame laws on

regularising unauthorised properties and study how other states have done on the issue. The

move is seen as an attempt towards generating revenue to the state government that is facing

financial stress.

Chief Minister B S Yediyurappa on Friday chaired a meeting of ministers and officials to

review the Akrama- Sakrama scheme.

"In today's meeting it was decided to reframe laws on regularising unauthorised properties and

study how other states have done on the issue," Yediyurappa said.

Within a week Urban development department will prepare new guidelines, he said.

Unauthorised layouts and buildings are being provided with all facilities, but they are not

paying a paisa to the government, he further said, adding that the intention is unauthorised

builder should be benefitted by getting his building legalised, while government should also get

the revenue.

The Akrama-Sakrama scheme was earlier proposed to regularize property violations, but was

not implemented, due to legal issues.

According to Yediyurappa, there are 2.93 lakh unauthorised buildings in Bengaluru City, and as

per an old survey there are 35 lakh unauthorised buildings across the state.

"It might have been doubled," he said.

He said, the law permits upto 6 per cent penalty for building which have violation upto 50 per

cent, and above this- the government can levy upto 25 per cent of market price.

When it was pointed out that the Supreme Court in 2017 stayed the Akrama-Sakrama scheme,

Yediyurappa said "We will submit a proposal to the supreme court about our plan and try to

convince it."

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Newspaper/Online ET Realty (Online)

Date April 17, 2020

Link https://realty.economictimes.indiatimes.com/news/residential/karnataka-to-

regularise-over-35-lakh-unauthorised-buildings/75214848

Guidelines on Covid19 Situation (applicable post 20th April; as appears on

mygov.in portal)