UP Govt’s decision to involve the local authorities, such as the NOIDA, Greater NOIDA Authority as part of the escrow account with the reality developer has been welcomes both by the developers and well as the homebuyers.
In connection to the latest development in the real estate market, the UP government has shown a step forward to boost the confidence of the homebuyers. The government has asked the local authorities, such as NOIDA Authority, Greater NOIDA Authority and Yamuna Expressway Development Authority to be part of the escrow account supposed to be opened with the buyers. While the new real estate act has made it mandatory to open escrow accounts, involvement of local government authorities will further reassure the homebuyers that their investments are safe.
There will be at least two direct benefits visible yet by this new development:
- The escrow account will ensure and keep a track that buyers’ invested money in a certain project is used judiciously for that specific purpose alone.
- The local authorities are now in a position to take decision to either refund the money to buyers or use it in future to complete a delayed/uncompleted project.
It has been seen that authorities were not keen to join the escrow accounts earlier as it would have made them accountable. Also, the efficiency and integrity of the local authorities is put on question mark and many are afraid that the situation of the homebuyers must not get deteriorated further as now they have to deal with a local government authority in addition to the builders.
However, the realty developers in NOIDA and Greater NOIDA have welcomed the move. They too feel that involvement of the local authorities would increase the credibility of the project and buyers’ moral. Buyers will be confident enough to pay their dues on a timely manner and the said projects will see completion as per their schedule.
The new policy also has a provision in the scope of the buyers to settle the refund with the developers in case the refund is not sufficient to pay back the entire money invested by them. But, the question is will the developers make the refund process so smooth? And, where is the stake of the local authorities in soothing the refund process, if the buyers have to again deal with the builders?
The move seems commendable so far in theory for the time being. Its efficiency and usefulness can only be realised when the buyers would reap the real benefit and justifiably get their refunds or witness completion of their delayed/cancelled projects.