Buyers of Jaypee’s real estate projects are grappling with mounting financial challenges, as over the six-year Corporate Insolvency Resolution Process (CIPR) period, which amounts to around Rs 600 crore has been charged in late payment penalties and interest on 4,000 buyers. This issue surfaced when buyers requested a statement of dues. The transfer charges for units in Jaypee’s projects were also raised recently from Rs 29,500 per flat to over Rs 400 per square foot, adding a significant financial burden on the homebuyers.
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Due to prolonged work stoppages in Jaypee projects, buyers withheld further payments during the bankruptcy phase. The CIPR for Jaypee projects spanned from April 2017 to May 2024, during which time co-developer Suraksha Group was appointed by the National Company Law Tribunal (NCLT) to complete the stalled projects. However, when buyers requested updated statements after Suraksha’s involvement, they discovered that 4,000 buyers faced late fees totalling Rs 600 crore, leading to objections that went unaddressed.
Further complicating the situation, the RERA registration for Jaypee’s projects lapsed and re-registration has not been completed. This delay has stopped banks from disbursing home loan funding to buyers, halting financing until the RERA re-registration is complete.
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According to NCLT’s instructions, Suraksha was expected to secure a construction loan of Rs 3,000 crore within 90 days from May 24, intended to fund the completion of unfinished projects. Despite this mandate, the loan has not been received over five months later, causing additional delays in project completion.
Additionally, the recent increase in transfer charges has significantly affected buyers’ potential resale costs. Previously, obtaining a No Objection Certificate (NOC) for selling a flat cost Rs 29,500. Now, owners of a 1,000 sq. ft. flat face transfer charges exceeding Rs 4 lakh, drastically raising transaction costs for potential sellers.
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In response to these accumulating financial strains, Ashish Kumar Gupta, President of the JIL Real Estate Allottees Welfare Association, announced that a petition will be filed in the NCLT. The association represents more than 20,000 buyers from 33 Jaypee projects awaiting home possession. The petition will contest the increased transfer charges imposed by Suraksha, interest charges levied during the bankruptcy process and the prolonged delays affecting project completion.
