How Different States Are Legalising Unauthorised Properties

With an aim to provide solution for housing shortage in urban areas, many states have come forward with their rules and regulations to legalise existing illegal colonies in the cities.

Let us have a quick look at that.

Maharashtra

The state urban development department has come out with draft rules to regularise illegal construction till December 31, 2015. Earlier, in the Budget Session, the state has already amended the Maharashtra Regional and Town Planning Act to pave the way for regularisation.

The state's policy for legalising unauthorised constructions will not apply to structures in ecologically sensitive zones, coastal regulation zones, land meant for playgrounds or parks, heritage buildings and structurally unsafe buildings, among others.

Structures that have violated FSI (floor space index) norms have to procure premium or fungible FSI or transfer of development rights, according to preset norms. The compounding charges of 10 per cent of land rate apart from the premium for the extra FSI will have to be paid by the owners or occupants of such structures.

For structures taller than the permissible limit, local authorities will have to explore the option of road widening. They would levy a compounding fee of 10 per cent of the ready reckoner rates to regularise such structures. Moreover, once the authority declares the structure as authorised, no further development or construction would be allowed beside maintenance and repair.

Delhi

The North Delhi Municipal Corporation has proposed to legalise all unauthorised properties measuring 50-250 square metres till December 31, 2016. However, the scheme will not cover encroachment on government land, height violations and plot with no structural safety certificate, as mandated under the Master Plan of Delhi-2021.

The scheme will be applied to properties in planned, plotted, unauthorised areas and urban villages. Property owners need to get a certificate from an architect that there is no violation of the height and structural safety rules to avail of the benefits. The plot owners will have to pay a penalty amount that would be fixed on the basis of circle rates for the excess construction.

The proposal will require an amendment to building by-laws under the Master Plan 2021 which will be approved by the Union Ministry of Housing and Urban Affairs for approval. This way, about 95 per cent of illegal properties in north Delhi will be regularised. This will help the municipal body mop up tax revenue of Rs 5,000 crore.

Tamil Nadu

The Housing and Urban Development Department of Tamil Nadu has also notified rules and guidelines for the regularisation of unauthorised structures. The rule allows the regularisation of unauthorised buildings built before July 1 2017, upon payment of a penalty amount to the municipal authorities. The penalties range up to three times of the guidelines value.

While the Greater Chennai Corporation is yet to open the online application process for house owners, who have violated the building byelaws, there are already 10,000 structures in the city which are yet to be regularised.

The new regularisation scheme makes applications mandatory, and failure to comply may lead to denial of basic civic and infrastructure facilities such as water supply, drainage and electricity connections. The application for regularising unapproved plots will not cover the buildings constructed over it. Separate applications must be filed for the buildings. The applications can be made online within the next six months.

Goa

Goa will be authorising illegal constructions built before February 28, 2014. Legalising any residential or commercial unauthorised construction can be carried out by a co-owner with the written consent of other owners in a joint property. Houses built on government land will not be authorised though. Apart from this, constructions falling within protected forests, wildlife sanctuaries, no-development zone, open spaces, public land, eco-sensitive zones, coastal regulation zones and khazan lands will not be legalised.

So far, 3,800 application has been received for regularization.

How regularisation impacts property market

Here is how regularisation of illegal constructions impacts property markets:

1.      With clear property titles, properties will qualify to be listed in the market. This would increase the supply of property for sale. This new supply of resale properties attracts end-users rather than investors.

2.      Legalising unauthorised areas and colonies result in increased construction activity in terms of redevelopment. The remodelling of structures in such areas becomes a common sight as the demand for properties subsequently rises due to newly gained legality.

3.      Illegal colonies are a hub of affordable housing. Once regularised, infrastructure would improve livability of these areas. Prices of these properties would shoot up after that.

4.      The rental market gets a fillip as soon as unauthorised area are legalised. With basic amenities in place, the asking values go up by 20 per cent due to favorable lifestyle and availability of important facilities.