Colonisers in Punjab demand more relaxations in regularisation policy

MOHALI: The four-month window for the regularisation of illegal colonies under the policy for regularisation of unauthorised colonies, announced in October last year, will end on February 19.

Out of more than 15,000 illegal colonies in Punjab, different development authorities like GMADA (Greater Mohali Area Development Authority) have so far received less than 100 applications for regularisation.

RELAXATIONS FOR REGULARISATION

The latest regularisation policy is less stringent than the previous ones. Also, the tepid response of colonisers is after the regularisation policy gives them an edge over developers of legal and approved colonies, in terms of conditions and government charges to be paid for development of colonies.

For instance, minimum area for a colony to be approved under Punjab Apartment and Property Regulation Act (PAPRA) outside municipal limits in the state (except area under jurisdiction of GMADA is ten acres and five acres under affordable housing policy. Under regularisation policy no minimum land area has been stipulated.

Also, for approved colonies, the salable area under PAPRA is 55% of the total area, with 5 % reserved for economically weaker sections (EWS).

Under the affordable colony policy, it is 65% with 5% land area for EWS. However, under the regularisation policy, colonisers can get their colonies regularised even with salable area of 80%. The total development charges in medium potential towns varies from ₹15 to ₹20 lakh per acre for approved colonies and affordable colonies. For high potential towns, the total charges are more than ₹1 crore. The compounding charges for illegal colonies developed after 2013 are almost half of the development charges approved colonies.

There is no condition for EWS housing to get an illegal colony regularised. While the approved projects must get completion and occupancy certificate, for regularization of illegal colonies there are no such conditions.

In approved colonies, the developer must provide basic amenities and infrastructure while for illegal colonies all such conditions have been waved off. The onus of internal development after an illegal colony is regularised lies with the state government.

COLONISERS: POLICY GOOD, ISSUES IN IMPLEMENTATION

The latest regularisation was formulated in close consultation with the colonisers. “We have no problem with the policy, but, it is the implementation which is causing problems,” says Gurvinder Singh Lamba, general secretary, Punjab Colonisers and Property Dealer Association.

The dealers association on Wednesday met senior state government officials, and submitted a memorandum of demands.

The association demands that only one set of documents is needed to be submitted with application.

“People who have applied under old policies are being asked to re-submit their applications. But, the competent authority should ask for a consent note from the applicant for processing their old applications,” says Lamba.

The association is also asking development authorities to accept cash as well as demand drafts as mode of payment for regularisation charges. Though, officials of the housing department say, this can lead to black money being used for payment of charges, some municipalities are accepting payment in cash too.

Currently, the NOC granted by the competent authority is the basis for getting registered sale deed of a plot. The association wants that instead of NOC only receipt of regularisation charges paid should become a basis for sale deeds. However, officials contend that in several cases NOC is not granted because such applications fail to meet the criteria. A housing department official on condition of anonymity said, “The development authorities and municipalities don’t have the inventory list of illegal colonies and plots. If this demand is accepted there would be unrestricted growth in illegal colonies.”

“Instead of considering first sale deed of plots as the date of establishment of the colony, the sale agreement should be considered the basis of colony establishment,” said Lamba.

The sale deed is a registered document while sale agreement need not be. “Date of establishment of colony is crucial for checking fresh expansion of illegal colonies. If done on the basis of sale agreement it can lead to expansion of illegal colonies,” contended housing department official. The association also blames the disparity between regularisation charges within and outside the municipal limits for poor response to policy, and has demanded its removal.against the provisions of the Punjab Apartment and Property Regulation Act (PAPRA) and regularisation policy itself, the colonisers are demanding change in ‘competent authority’ from chief administrators to estate officers in development authorities.

The colonisers are also demanding extension of the policy deadline for regularisation in another four months.

“Regularisation of plots and colonies is independent of each other so extending deadline for colonies will only encourage expansion of illegal colonies. On payment of 50% penalties, colonisers can apply even after two months of closure of policy deadline,” a housing department official said.

Most of the association demands are centered around plot regularisation. Ironically, the applications for plots regularisation have steadily increased even though there is no deadline for regularisation of plots and colonisers are not coming forward for it even though the stated deadline ends on February 19.

INCREASE IN SALES

Real estate developers have been struggling to keep their sales books rolling for the last few years as demand from end-users has been low, while investors have been steering clear of the market.

However, according to reports from different real estate consultants, sales of residential units improved during 2018.

For instance, according to a report by Knight Frank India, a real estate consultant, “Residential sales grew by 6% during the year 2018 compared to the previous year, 2017.” The report was based on the sales figures from eight cities—mumbai, NCR, Bengaluru, Pune, Chennai, Hyderabad, Kolkata and Ahmedabad.

Similarly, according to the quarterly report from Proptiger.com, part of Elara Technologies Pte Ltd which also owns Housing.com and Makaan.com, “On year-on-year basis, sales improved on average by 30% in Q3 2019 compared to Q3 2018.” The Proptiger report covered all the cities that Knight Frank India did, but assessed Noida and Gurgaon separately instead of treating NCR as a whole.

Though sales improved, the numbers are far from offering comfort to developers. Supply side stakeholders were expecting much better sales during 2018, but they remained below expectation during the 2018 festive season.

Liquidity crunch in the industry at the end of the year also had an impact on the sales. According to the Proptiger report, Pune witnessed an increase of 59% in sales during the December quarter in FY19 compared to the same quarter in FY18, followed by Mumbai with 54% increase during the same period.

However, unlike Mumbai and Pune, the NCR market did not do well. Gurgaon witnessed a fall of 26% in sales, while Noida sales improved marginally by 4%.

HIGH INVENTORY

Given that most developers are focusing on clearing inventory and not launching new projects, “unsold inventory came down by 10% from 892,175 units to 799,081 in top 8 cities during Q3 FY19 compared to Q3 FY18, respectively,” said the Proptiger report.

Though the inventory came down a bit, the number of unsold units is still very high and continues to remain a concern for developers.

According to the Proptiger report, “Inventory overhang has decreased to 31 months as compared to 34 months from the last quarter.”