The NDA government’s 2-year term at the Centre has been marked by far reaching reforms in the real estate sector, including the landmark Real Estate Regulation Act (RERA). Among the states, it is Haryana that has has emerged as a front-runner in land and property related reforms after the installation of a new government in the state as of October 2014. Haryana has taken several measures to boost real estate and housing, particularly affordable housing, and more such reforms are in the pipeline to rev up realty. Vinod Behl has a story.
Even before the Centre could clear the consumer-friendly RERA (Real Estate Regulation Act), the Haryana government took a far-reaching measure to protect interests of home buyers by setting up the Allottees Grievances Redressal Forum (AGRF). This move envisaged setting up redressal forums in all the districts of the state to tackle issues of delayed possession, breach of builder-buyer agreements, inflated External and Internal Development charges, cheating on flat sizes, exorbitant maintenance charges, reneging on promised amenities and specification of building materials, inadequate infrastructure and poor maintenance, etc. In order to ensure ease of business, the Haryana government also formulated a policy under which district level committees can clear small projects requiring investment of INR 10 Cr. and grant of CLU for areas up to one acre.
While the Union Urban Development Ministry has set a one year deadline for states to implement its model real estate regulation cleared by Parliament, Haryana has once again taken a lead, by taking steps to implement one of the key provisions of this landmark act – to open escrow accounts for housing projects. In a recent far-reaching decision taken in connection with a stalled project of a leading builder in Gurgaon, the Department of Town & Country Planning has asked the builder to complete the remainder/pending project within a stipulated period by opening an escrow account.
Another landmark reform of the new Haryana government pertained to new land development policy, christened as the ‘New Integrated Licensing Policy’ (NILP) for residential and commercial complexes, is meant to give a big push to housing, particularly affordable housing. Under this policy, initiated for high potential areas of Gurgaon-Manesar-Sohna, Faridabad-Ballabgarh, Sonepat-Kundli , Panipat and Panchkula-Kalka-Pinjore, the minimum land cap for large housing projects has been reduced from 100 acres to 25 acres, ensuring that large tracts of land lying unused due to tough provisions of the New Land Acquisition Act could be put to use to develop housing and related infrastructure, and land owners – especially small land owners get the market rate for their land.
As part of this policy, the concept of Transferable Development Rights (TDR) prevalent in states like Maharashtra was introduced for the first time in Haryana. With the introduction of the TDR concept, land owners can now monetize their land holdings at current market prices in residential sectors and in areas marked for external development works like sector roads, creating infrastructure for water, sewage and electricity besides social infrastructure like schools, colleges, hospitals, parks etc. On the other hand, builders can raise the FAR of their projects by buying TDRs from land owners, which will in turn will benefit property consumers by way of affordable pricing. All in all, NILP is meant to balance the interests of all the stakeholders including land owners, real estate developers and investors/buyers/consumers of residential plots or flats.
In yet another significant policy initiative to boost real estate, the Haryana government has taken a two-pronged measure to create more space for housing in cities by allowing plot owners to increase ground coverage as well as purchase additional floor area ratio (FAR). Applicable to licensed colonies and sectors of Haryana Urban Development Authority, the new policy will be a bonanza for property owners.
As part of its land reform initiatives, the Haryana government has also come up with a policy for licensed colonies, under which builders can exchange land among themselves for better planning of licensed colonies and residential sectors without affecting the net area. The state government has simplified the process of change of land use (CLU), under which projects up to one acre area and costing up to INR 10 Cr, are given single-window permissions by respective deputy commissioners, while the projects of over one acre area and costing more than INR 10 Cr, are cleared by an empowered committee headed by the Principal Secretary to the Chief Minister. Automatic Change of Land Use effected in 75 blocks has a provision of Auto CLU Permission with an automatic dispensation of deemed clearance in case the competent authority does not decide on the request for grant of CLU permission within the prescribed time frame of the department.
In order to give boost to affordable housing, the new policy initiated by the state government has a provision to allow builders of affordable housing projects to receive up to 25 percent of apartment price without getting environment clearance. It also has a provision for return of money by the builder to customer with 12 percent interest if the builder is not able to get environment clearance within a period of 12 months from the date of accepting money from customers. The Affordable Plotted Housing Policy 2016 facilitates creation of additional affordable housing stock in the low and medium potential towns of Haryana. The policy aims at developing high density plotted colonies by making small plots available through a liberal policy framework. Under this policy, the planned area of residential projects will be between 5 acres and 15 acres and the maximum permissible plot size would be 150 sq metres.
Haryana has also taken reform measures to promote renewable energy. As part of Haryana Solar Power Policy 2016, the focus is on rooftop solar power systems, making these mandatory for plot sizes of 500 sq yards and above.
Solar plants have also been made mandatory in all government and private educational institutions, universities and offices having connected load of 30 kw, and on top of all private hospitals and industrial/commercial establishments having connected load of 50 kw. To promote energy efficiency in homes, the state government has made the use of LED lamps mandatory by amending the Zoning Plans of licensed colonies and CLU granted sites. Implementation of this rule is to be ensured at the time of grant of Occupation Certificate.
This realty reform process initiated by the Haryana government carries on, with more such reformatory initiatives in the pipeline. Within a month or so from now, property licensing and all processes pertaining to CLU are expected to go online. And since the online system will disclose minute details of project and allottees, it will come in handy to check EWS scams like one person applying and acquiring multiple flats. It will also check corruption in granting licenses for real estate projects and granting CLU from agricultural to residential/institutional/industrial land. In the near future, Haryana also proposes to digitize all land records in the state. Gurgaon land records have already gone online. The state government is also going in for detailed digital mapping of all its cities in order to make available geo-spatial data to all the departments for their planning needs.
Work is also apace on a policy for proper utilization of thousands of acres of surplus land lying with various government departments and PSUs across the state. For this purpose, the inventory of such idle land tracts is being prepared. Efforts are also on to create a hassle-free and cost-effective business environment to attract investments in the real estate sector.