Homebuyers Body FPCE Urges PM Modi to Waive Interest on House Loans, Seeks More Sops

 

Homebuyers body FPCE has written to the Prime Minister, seeking interest waiver on home loans and more tax sops to deal with the liquidity crisis amid COVID-19 pandemic.

Forum for People’s Collective Efforts (FPCE) also expressed disappointment over the six-nine months extension given to builders to complete the projects. It suggested that builders should get an extension for the actual lockdown period.

In a letter to Prime Minister Narendra Modi dated June 1, the association suggested that the government’s policy should focus on homebuyers instead of builders for revival of this sector.

It also welcomed various decisions of the government and the RBI to fight the economic difficulties being faced by the country due to the lockdown. However it was “aghast at the bias shown towards the real estate builders”.

FPCE said that the Housing and Urban Ministry convened an emergency meeting of the Central Advisory Council (CAC), a body notified under the Real Estate Act (RERA), on April 29, 2020, to provide a blanket extension to all real estate projects across the country for 6 / 9 months, over and above the 1 year already provided under section 6 of the realty law RERA.

“FPCE had opposed the decision, as it is in violation of the Act,” the letter said, adding the decision was taken ignoring its views.”

The proposed extension is illegal and beyond the powers under the law, and that the 1 year already provided under section 6 should be exhausted first, it argued.

“In-fact, Sir it is the home buyers of the country who are in dire need for support from your government as they are facing unprecedented job losses and pay-cuts,” the letter said.

The association said the government has given a moratorium on EMI payments for six months, but it would only increase the future interest liabilities.

“In addition, we would like to bring to your notice that it has become a practice amongst the regulatory authorities to provide indiscriminate extension to real estate projects without following the requirements of the law (section 6), which clearly stipulates that an extension can only be given ‘when there is no default on the part of developers and only on grounds of Force Majeure’,” FPCE complained.

The extension in timelines of projects completion increases the EMI, rent, mental agony and harassment, while shattering dreams of owning a home.

FPCE urged the Prime Minister to direct housing ministry to modify its advisory on force majeure due to COVID-19, to be in line with section 6 of RERA, and that to only for the actual period of lockdown when construction was not permitted, without any further liberty to the authorities to extend.

“Anything other than this, is patently illegal and should not be promoted by the very custodians of the law,” it said.

The association pointed out that lakhs of home buyers are already stuck in stalled projects and no relief has been provided even after three years of implementation of the RERA.

“On top of this, they are going through difficult times due to unprecedented job losses and pay-cuts and it is our national duty to bring to your attention the difficulties being faced by millions of us, with the hope that there is one person out there, our PM, whose decisions will benefit the masses and not the classes,” the FPCE pleaded.

For providing relief to homebuyers, the association suggested waiver of interest amount during the moratorium period on EMIs payable by home buyers.

It sought amendment in section 24(b) of the Income Tax Act, 1961, removing the 5 years limitation in claiming deductions on interest on home loans.

“Where an assessee is paying both EMI and rent and date for scheduled handover of possession has passed, there should be separate deduction for EMI paid from the total income of such assessees over and above any other deduction being currently provided,” the letter said.

The benefit of reduction in interest rate should be automatically passed on by the banks to all borrowers, existing and new ones.

“Despite the innumerable concessions provided to the builders’ community by the government in the years past, there has been no recovery in the real estate sector.

“The policy prescriptions are misguided to say the least. The cause, from an all-time boom in the sector to the slowdown in the past few years, is a result of the unending greed of the builders community. If only the Government had invested its policies and prescriptions in the interest of home buyers, the situation would have been much better,” the letter said.

 

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