Centre Grants 4-Month RERA Extension Due to West Asia War

The Centre has officially declared the West Asia conflict as a 'war' for invoking force majeure provisions under RERA. This decision has led to a uniform four-month extension for registered real estate projects whose completion dates fall on or after February 28.

The Ministry of Housing and Urban Affairs issued a circular on July 31, advising all State RERA authorities to grant this extension. The circular refers to the Ministry of Finance's Office Memorandum dated April 29, which treated the ongoing West Asia situation as 'war' for invoking the force majeure clause.

The Housing Ministry received representations from stakeholders stating that the conflict disrupted global supply chains, caused shortages of construction materials, and affected timely completion of real estate projects. Section 6 of RERA permits extension of project registration on force majeure grounds, and 'war' is specifically recognised as one such ground.

The government has advised RERA authorities in all states to issue appropriate orders or directions granting a four-month extension for projects whose completion dates fall on or after February 28. RERA authorities, including MahaRERA, are expected to issue a blanket extension order shortly.

However, the July 31 circular concerns only Section 6, which deals with extension of project registration due to force majeure. It does not advise RERA authorities to grant an 'interest holiday' for the four-month period from February 28, 2026, or deprive homebuyers of interest payable on refunds when they exit projects because of delays already incurred.

The circular gives no exemption to promoters from paying monthly interest for continuing delays in projects already delayed as of February 28, where buyers choose to remain in the project. Promoters may argue that no interest should be payable during the extended period, but Section 18 of RERA provides for interest on refunds to buyers exiting delayed projects and monthly interest to buyers continuing in them, without making this liability conditional upon any force majeure clause.

The Supreme Court has held that the homebuyer's right to interest at the prescribed rate under Section 18 is 'unqualified' and 'indefeasible'. Further, Clause 6 of MahaRERA's Model Agreement for Sale does not exempt promoters from interest liability merely because delay arises from force majeure events.

The four-month extension is expected to provide relief to builders, but homebuyers' interest rights remain protected. The extension will apply to all registered real estate projects whose completion dates fall on or after February 28, and RERA authorities will issue orders or directions granting the extension shortly.

In the context of the real estate industry, this decision is significant as it acknowledges the impact of the West Asia conflict on global supply chains and construction materials. The extension will provide builders with more time to complete projects, but it is essential to note that homebuyers' rights to interest on refunds and monthly interest remain unchanged.

The Centre's decision to grant a four-month extension due to the West Asia war highlights the complexities of the real estate industry and the need for regulatory bodies to respond to exceptional circumstances. As the industry continues to navigate the challenges posed by the conflict, it is crucial to ensure that homebuyers' rights are protected and that builders are held accountable for delays and interest payments.

In conclusion, the Centre's decision to grant a four-month RERA extension due to the West Asia war provides relief to builders, but homebuyers' interest rights remain protected. The extension is a significant development in the real estate industry, and it is essential to monitor its impact on the industry and homebuyers in the coming months.

The decision is also a reminder of the importance of regulatory bodies in protecting homebuyers' rights and ensuring that builders are held accountable for their obligations. As the real estate industry continues to evolve, it is crucial to strike a balance between providing relief to builders and protecting the rights of homebuyers.

The four-month extension is a temporary measure, and it is essential to ensure that builders do not use it as an excuse to delay projects further. Homebuyers must remain vigilant and ensure that their rights are protected, and regulatory bodies must continue to monitor the industry and take necessary actions to prevent delays and ensure that builders comply with their obligations.

In the end, the Centre's decision to grant a four-month RERA extension due to the West Asia war is a significant development in the real estate industry, and it is essential to monitor its impact on the industry and homebuyers in the coming months. The decision highlights the complexities of the industry and the need for regulatory bodies to respond to exceptional circumstances, and it is crucial to ensure that homebuyers' rights are protected and that builders are held accountable for their obligations.