Many housing societies may not own land in Master Plan of Delhi’s new zones and may have sold apartments in the garb of society membership and collected over Rs 1000 crore.
Can housing societies ‘registered’ under land pooling policy qualify as a ‘developer’ under the Real Estate (Regulation and Development) Act? Real estate experts say that many of them may not own land in Master Plan of Delhi’s new zones and may have sold apartments in the garb of society membership and collected over Rs 1,000 crore.
With RERA notified for NCT of Delhi, projects cannot be launched without complete approvals and sanctioned plans and project registration with the regulatory authority. “Since the policy involves surrendering of land and fresh allotment of land, buyers should be careful in committing any money to project announcements under this scheme by private development companies,” warns Rohan Sharma, associate director – Research & Real Estate Intelligence Service, JLL India.
Hundreds of homebuyers who invested in ‘dwelling units’ that were sold to them for as little as Rs 12 lakh were perhaps not aware of the fact that no cooperative society has been registered or allotted land by the Delhi government after 1992. Many of these 40 societies have been registered outside Delhi or as multi-state, multi-purpose cooperative societies.
Experts estimate that the total amount collected fraudulently so far from homebuyers, going by the Rs 8 lakh to Rs 15 lakh paid per apartment, could be around Rs 1,000 crore.
Under Delhi’s land pooling policy 10 lakh dwelling units are expected to come up in Delhi’s new zones – J, K (I and II), L, N and P (I and II). These will be in areas such as Kanjhawla, Madanpur Dabas, Jatkhor and villages around Najafgarh, Chhawla and Kadipur.
By notifying 89 rural villages as urban areas this month, the Lt Governor of Delhi Anil Baijal has removed a major bottleneck and paved the way for operationalisation of the long-pending land pooling policy. Implementation on the ground may take another year as it involves coordination between multiple agencies.
The LG’s office and Delhi government have only notified these villages as urbanisable areas over the past two days but some of these 40-odd societies have been selling membership since the past three to four years, say experts.
Under RERA guidelines they cannot sell without a sanctioned building plan. Showcasing agriculture land and selling apartments are an exercise in paper sales and illegal in nature, they say.
RERA also calls for setting up of a real estate regulator and developers have to furnish authenticated copies of the title deed of a property reflecting the title of the promoter to the land on which the project is to be developed and show original sanctioned plans and layout plans. They also have to make disclosures of the total amount of money collected from allottees.
“Societies, in their capacity as promoters, will need to register under the RERA. Since non-registration (after the setup of the regulator) is a punishable offence, societies have to continue to have to abide by this requirement. This is likely to create a transitional problem,” says a lawyer with a leading legal firm.
“Under LPP, land can be allotted anywhere within a radius of 5 km radius after the land pooling exercise is complete. Therefore, the land most buyers have been shown may not be where their housing complex may come up,” says Ramesh Menon of Certes Realty.
Even if some of these societies own land, it is still agricultural in nature and barred from collecting money against it. Once a regulator is appointed, these societies may or may not qualify as developer entities as per the RERA guidelines and that may jeopardise investments made till date, say experts.
Only those societies who have construction experience, may have a combined turnover of a few crore rupees and are loan worthy to receive financial support from banks can qualify as a developer.
Therefore, if your society does not meet these criteria, you should seek a refund.