Undelivered homes: Judicial process has to act fast

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Housing is one of the fundamental requirements of any society. About 5 lakh homebuyers have paid up the cost of that dream dwelling unit in apartment complexes many years ago but are yet to get the delivery. Needless to say, for many, it creates a nightmare of a situation where a huge part of the savings of an individual, sometimes leveraged through banks and institutions, have been paid to developers who have not stuck to their promise of timely delivery of a flat. It not only burdens one with debt obligations or deprives of the opportunity earning if the fund was deployed somewhere else but also creates emotional turmoil of not being able to live in a dream home perhaps stay put in a rented place much against the wishes of the family.

The failure of major real estate companies has grabbed headlines in the past. By the end of 2020, there were at least 1,132 unfinished real estate projects in seven Indian metro cities. The real number of unfinished projects that have gobbled the funds of buyers and are yet to deliver is far higher.

In such a scenario, the government, the supreme regulator of all markets, has to wake up. Over the past few years, it did oversee RERA regulate the real estate market bringing in a modicum of discipline to the unruly sector where many developers diverted the funds from one project to another, while buyers of the original project continued to suffer. But RERA could be of no help in cases of bigger collapse.

The government has to ensure that the National Company Law Tribunal and other courts deliver quickly on the new bankruptcy laws. If a developer cannot deliver, it might have to make way for white knights to step in and deliver for the buyer.