What Does Zero Period In Real Estate Mean?
In Noida, after the National Green Tribunal's (NGT) ban on construction in August 2013, the work on projects came to a standstill for 77 days. Almost 20 housing projects were affected, which included group housing projects in sectors 15, 16, 16B, 32, 44, 74, 75, 77, 94, 96, 98, 104, 120 and 124. What happened to the homebuyers who had invested in apartments here and the brunt they bore due to the delayed possessions? Well, the Noida Authority waived off the interest for developers during this period. This is called the zero period, the benefits of which the officials expect to be passed on to the homebuyers.
Effective dates
In case of projects in Noida, the zero period was declared for days when the construction work was on a standstill – from 14 August 2013 to 28 October 2013. Moreover, penalty for late payments was also waived off for period between 29 October 2013 and 19 August 2015. The case was settled in 2015 and it was decided that the eco-sensitive zone would range from 1.27 km on the north boundary of the sanctuary till the DND flyway and 100 metres on the other sides. This brought in relief to over one lakh homebuyers in the region.
How is zero period calculated?
Developers had bought group housing land by paying 10 per cent of the total land cost and the rest of the 90 per cent was to be paid in installments. This money has to be repaid at the rate of 12 per cent and defaults on the developer's side would mean he will have to pay penalty at three per cent. However, the Noida Authority had confirmed that even the penalty for default would be waived off.
How do home buyers benefit?
Buyers were motivated with this step and in turn, demanded developers to pass on the benefit of the interest waiver. However, this is time taking.
Similar cases
Developers who were stuck due to the litigation may receive interest waivers by the Greater Noida Authority. In April 2011, farmers in Greater Noida West challenged the forceful land acquisition in the Allahabad high court. The dispute in some cases between the authority and farmers were settled in 2012. Others are pending in the courts and therefore the Authority has sought to do a survey and understand which ones are genuine cases and would get the benefit of zero period.