In yet another relief for Mumbai developers, the Maharashtra Housing and Area Development Authority (MHADA) on Tuesday waived interest payable on premiums for redevelopment projects under Development Control Rules 33 (5) and affordable housing projects under Prime Minister Awas Yojana (PMAY) scheme from March 25 till December 24, 2020, due to force majeure conditions.
“During the said period up to December 26, 2020, no interest will be levied on the regular and default instalments,” said the order signed by MHADA vice president and CEO Milind Mhaiskar on Tuesday.
The order said defaulters who failed to pay instalments before March 25 would have to pay regular and penal interest till March 22, and instalments payable during the ninemonth moratorium period will have to be paid within 15 days after the period ends (before January 10, 2021).
The concessions are in line with the decisions by the Ministry of Housing and Urban Affairs (MoHUA), and Maharashtra government to treat Covid-19 pandemic as force majeure condition and grant various concessions for nine months from the start of the lockdown period.
The MoHUA had issued the advisories in May acknowledging that the pandemic and subsequent lockdowns had led to reverse migration of labourers, disrupted the construction supply chain, and severely impacted the real estate sector. The developers had made representations to the ministry seeking reliefs in approvals, NOCs, premium payments for a minimum of nine months. The state RERA authorities had also added the pandemic as a force majeure factor in giving its rulings, and given automatic extensions to real estate projects whose registrations and completion timelines fall in the nine-month moratorium period.
This is the second big concession given to Mumbai developers after the Maharashtra government reduced stamp duty on property transactions from 5 per cent to 2 per cent till December 31, 2020, and to 3 per cent till March 31, 2021. The cut in the stamp duty is expected to boost demand ahead of Diwali, Navratri and Christmas.
On Monday, the Reserve Bank of India accepted the five-member KV Kamath Expert Committee report which set the financial parameters for lending institutions setting the stage for one-time loan restructuring for corporates. Real estate was included in the list of 26 sectors hit by the pandemic.
A group of developers associated with the apex body National Real Estate Development Council had also announced that they will reciprocate by absorbing the 2 per cent stamp duty and offering properties in their projects at zero stamp duty.
