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Does your builder have these necessary approvals?

Real estate developments must receive different approvals from various authorities before the property can be considered legal and authorized. If one or many of these are missing, then it can delay completion or even bring down the value of the property at a later date. In a worst case, lack of approvals can make it difficult to get a loan to finance the purchase or re-sell the property. No one wants to sink his or her money into something that is illegal and might lose value. So make sure that the developer has the following approvals before you finalize your property purchase.

1. Non-agriculture order: Is the land authorized for residential accommodation? The government grants permission for certain lands to have certain types of usage. A lot of the new residential developments occurring are in areas outside the city centre where the land might have been earmarked for agricultural purposes only. Please confirm with the developer that they have permission for non-agricultural use on the land that they are using for the residential project. Without due permission from the concerned authority, it is illegal for a developer to commence any construction activity in an area zoned for agricultural use. So, make sure that your developer obtains the conversion order or the non-agriculture order.


2. Building plan: Has the building plan been approved and sanctioned by the local municipal authorities? Before construction is started, a developer has to submit the building plan to the concerned authority of the state for their approval. The building plan assures the authority that the project complies with the building by-laws of that state/city. For instance, in Delhi, the building plan has to be submitted to the Municipal Corporation of Delhi (MCD), and in Gurgaon the plan needs to be submitted to Haryana Urban Development Authority (HUDA).
   
   

   While getting a plan approved might be a formality, it must be completed. Sometimes the developer might apply for approval simultaneous to accepting bookings for apartments in the development. In such a case, understand how your booking amount will be refunded if the approval is not received.



3. Floor plan approval: Do the floor plans meet safety requirements? A floor plan is also required to be submitted by a developer to the authority in order to seek permission from them regarding the layout of the apartment. This ensures that the building does not deviate from minimum acceptable levels of safety such as fire exits, amount of space devoted to common areas like lift and lobbies etc.


4. No objection certificate (NOC): Does the developer have the necessary approvals from civic authorities that won't affect the validity of the property later on? Developers need to get NOCs from several departments to ensure that the property is following all the applicable rules. An NOC from the pollution board is required to make sure that the project adheres to the environmental standards. An NOC from the water supply and sewage authorities is also needed. It is also important to get an NOC from the neighbouring properties to prove that the developer is not encroaching any neighbourhood property. NOCs from the respective state authority is also essential before carrying out the construction activities like digging a bore well.


5. Commencement certificate: Once all the plans submitted by the developer are approved, the local authority gives a go-ahead to the construction process by giving a commencement certificate.


6. Title deed: Is the legal ownership of the plot of land on which the development is occurring legally clear or is it under dispute? The developer needs to get a clear title for the land or plot where the property will be constructed. If the title is in dispute it means that the ownership is unclear. For you, as an end consumer, buying an apartment built on land where the ownership is in dispute means taking on a lot of risk that you are better off staying away from. For instance, there is a risk that no lender will offer home loans for this development, or the ownership dispute might be held up in court that can delay construction or possession and so on. Only buy a property where the title is clear. If there are lenders who have agreed to offer loans on this property, then that is a good signal that the title is clear.


7. Occupation certificate: Finally, after the construction is complete, your apartment will be ready for occupation by you. However, before you are handed over possession and before you are able to occupy the apartment, the property has to be certified fit for occupation. The developer will get this permit for you once the construction is complete, but before you get possession of the property.

Buying real estate can be tricky if some of the above permits are not there. Lack of these approvals might mean that your property is not legal or not worth the money you paid for it. So, best to avoid trouble by ensuring at the time of booking (or purchase) that development meets all the requirements laid out by the authorities and the laws of the land.

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