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Real Estate Development - Need To Simplify Legal Procedures

Amit Thakkar
24 Feb 2020 7:21 AM GMT
Real Estate Development - Need To Simplify Legal Procedures
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More often, several real estate development projects are stalled at a very primary stage, may be at the stage of procurement of land, or in process of seeking various permissions under different statutes. The unhappiness amongst the real-estate developers as regards the complexities in the procedures and in getting the required permissions, appears quite genuine. It is noticed that many litigation proceedings, at least by or against the respective State Governments arise due to delay in procedures and technicalities.

In spite of several amendments over the past years and introduction of new laws, the legal clutches in the process of real-estate development have increased. The main motive of simplification of the process of development seems very distant. If the grievance amongst the real-estate developers is to be believed, the procedures of getting clearances, even before starting the project are too complex and time consuming. Taking example of Gujarat, the hurdles for a developer are endless.

1. verifying the title of the land.

The procedure starts from verifying the title of the land. Title verification requires detailed scrutiny and searches at various offices.

  • land revenue records - reflects the owner of land, type (agricultural or non- agricultural),the

tenure (alienable or non-alienable) and other rights like tenancy or charges like mortgage, etc .

  • Sub-Registrar's office- search is required to verify the documents registered in respect of

the concerned property, in the past.

iii) Concerned Development Authority - Zoning of the land, i.e. industrial, agricultural, residential, education, etc and whether reserved under the development plan for any public purpose, is reflected in the zoning certificate issued by the concerned Development Authority.

iv) Town Planning officer - Re-distribution statement and the part-plan under the Town Planning Act, reflects the effect of the T.P. Scheme, ie. the details of allotment of final plot, reservations, if any under the Town Planning Act.

v) Agricultural land Ceiling Act, provides for ceiling i.e. maximum land an agriculturist can hold, beyond which the holding is illegal. Buyer also needs to verify that land so purchased is not declared excess and /or proceedings are not pending in respect thereof.

vi) Prevention of Fragmentation and Consolidation of land holdings Act, restricts division of land below the prescribed minimum area, which is different for different towns and villages.

vii) Verification in respect of electricity lines and /or underline gas pipe lines, if any passing through the land.

viii). The Urban Land Ceiling Act' (repealed since 1999). It is advisable to obtain NOC from the ULC department in cases where land falls within the city limits, since in certain cases litigations are pending and claim of State Government needs to be verified in respect of orders and its effect prior to the repeal.

ix) Verification from District Land Records, office of the gram panchayat or the District Panchayat, if there is discrepancy as regards the boundary and measurement of the land.

x). Verification be done to ascertain if the land is acquired or proposed to be acquired, under the Land Acquisition Act. This can be verified from office of the land acquisition officer or on verifying the public notices or the notices served to the owner.

xi) To verify if any litigations, or disputes are pending as regards the land.

The above list though exhaustive may not be conclusive ;

2. Procurement of Permissions ;

Right from the time of procurement of land till the starting of the project, several permissions from different government departments functioning under different statutes, are required.

i) If a non-agriculturist intends to purchase agricultural land, prior permission is required under the tenancy Act.

ii) Prior to using the land for non-agricultural purpose, non-agricultural use permission ( popularly known as N.A permission ) is required under the Gujarat Land Revenue Code.

iii) Non-Agricultural permission, can be obtained by online application. More often, problems surface when NA use permission is applied for, as in the process of seeking such permission, the reports and opinion of several departments, including the revenue mamlatdar, the tenancy act, the office of the Urban Land Ceiling Act (ULC Act is repealed since 1999), the town planning department, are obtained by the Collector's office.

iv) Development permission for plotting or construction, is required from the concerned authority which may be Municipal Corporation, the Urban development Authority or the District Panchayat.

v). Development is restricted in lands falling within the Coastal regulation Zone (CRZ). Coastal stretches of seas, rivers, creeks, backwaters, which are influenced by tidal action, are classified under the CRZ. In such cases CRZ clearance is required from the concerned State or the Union territory Coastal Zone Management Authority.

vi) For development of lands within a radius of twenty kilometres from the Aerodrome Reference Point of the civil and defence aerodromes, No Objection Certificate, including for height clearance, is required from the concerned / designated authority of Central. More information can be gathered from the Airport Authority of India, or from its website.

vii) Subsequent thereto comes into picture the RERA act, focused at keeping check on developers and for security and safety of the buyers. Project registration under the said act is mandatory.

Going through, the entire process, is more difficult and complex, then it appears from the above reading. More often are projects caught in the limbo due to problems arising under one or more of the many statutes, referred to hereinabove. Though, over the years efforts are made to remove the complexities, much requires to be done to catch up with the speed and pace at which development is underway. Revenue records are now available online, which is a major factor easing the process of primary verification. However, the process of mutation of entry in revenue record on transfer or creation or extinction of rights, still calls for further simplification. Similarly, even applications for development permissions are now accepted online, which though a major success, it has its own practical difficulties. RERA being a recent introduction, the implementation is still being streamlined. As can be seen multiple offices are required to be approached which makes the procedure complex.

It is high time that laws are simplified, for regulating the development of land. It is the need of the hour to minimize the complexity and problems arising in view of the different statutes.

Here are some suggestions :

i) Firstly, as far as title verification is concerned, the revenue record requires to be synchronized with the various authorities under different statues, in a manner that all issues which requires to be redressed are reflected in the revenue record. This would help the buyer in identifying the issues and the problems, if any, in the land and subsequently, he would not face unforeseen problems.

ii) If aspects like zoning of land, effect of T.P. Scheme, reservation or proposed reservation if any, effect of underground or overhead electricity lines or gas lines, etc. and pending litigations in respect of land, and effect if any of any CRZ or aerodrome are reflected in revenue record, then the entire process would be easier. There would be no chance of any person being misled while entering into transaction. The same would minimize the disputes and litigations.

iii) Further, for development, a single window clearance system requires to be introduced. Earlier, section 117(a) was introduced in the Gujarat Town Planning and Urban Development Act, wherein, once the person takes development permission under the said Act, no other permission under any other law was required. The said section is deleted w.e.f. 1999, considering the situations prevalent then. Now two decades after, there is a need to introduce such law, whereby development is regulated in a simplified manner.

iii) Once the land is designated under a particular zone permission for use in accordance with the zone so designated should be a formality with minimum possible procedure. Other factors like revenue payable to the government under different laws, conversion charges from agriculture to non-agriculture, payment of premium for removal of restrictions under tenancy act, and such others, should be worked out and posted as a charge in revenue record in advance and necessary development permission can be granted on clearance / payment of same to the Government. Development can be regulated based on Zonning under the Town Planning laws instead of multiple laws.

The rapid development and global competition, demands simplifying procedures so as to make the process of development simpler, smoother and easier.

( The author is an advocate practicing in Gujarat High Court )

Views are personal only.

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