Telangana government to crack the whip on illegal land schemes
It added: “… the sale of UDS lands without prior registration of the project with TS-RERA shall attract penalty up to 10% of the total project cost under Section 59 of the RERA Act, 2016.”
HYDERABAD: Cracking the whip for the first time on developers illegally selling undivided share (UDS) of land in realty projects, the Telangana State Real Estate Regulatory Authority (TS-RERA), on Thursday, said that such sales will attract severe punishment – up to 10% of the total project cost.
The decision was taken following a meeting with industry representatives and other senior officials.
“It has come to the notice that certain promoters/builders/developers are advertising/marketing/selling units in the un-divided share of lands in projects to be launched/constructed at nominal/discounted prices. This is not in consonance with Section 3 (1) & 4 (1) of the Real Estate (Regulation and Development) Act, 2016 and Rule 1 (2) of the Telangana State Real Estate (Regulation & Development) Rules, 2017,” read a circular issued by Somesh Kumar, chairman, TS-RERA.
It added: “… the sale of UDS lands without prior registration of the project with TS-RERA shall attract a penalty of up to 10% of the total project cost under Section 59 of the RERA Act, 2016.”
The issue of mushrooming UDS projects was highlighted by TOI earlier this year after industry insiders termed them as “Ponzi schemes” floated to cheat buyers of their money. Under this scheme, a customer is sold a small share of land from a larger land parcel – like 100 square yards from a 10-acre property – for an upfront payment, ranging between Rs 30 lakh and Rs 50 lakh bracket (on an average). Against this purchase, the buyer is promised a constructed home/apartment, once the entire land parcel is developed.
While these projects, as per the various sections of the RERA Act, need to be cleared by concerned authorities, market observers say that a majority of them have no permissions in place.
Apart from warning defaulting builders, the latest circular issued by the RERA the chairman also cautioned the general public against buying such flats/plots/units as they carry “a high risk of getting cheated by such promoters/developers/builders”.
The directive has been welcomed by Hyderabad’s realty sector players who say that strict measures are important to protect the image of ‘brand Hyderabad’. “It will not only help genuine developers and the industry as a whole but also protect buyers from getting duped. It is extremely pertinent that the government comes down strongly on those indulging in such offenders,” said P Ramakrishna Rao, president, Credai-Hyderabad.