Govt. Launches One-Time Scheme to Regularize Unauthorised Buildings: A Win-Win for Buyers and Developers

In a move that could be a game-changer for both property buyers and developers, the Town and Country Planning Department has launched a one-time scheme to regularize unauthorised buildings and those constructed with deviations from the approved plan. This scheme, introduced with a regularization fee, is set to generate significant revenue for the government while offering much-needed relief to those caught in the complexities of unauthorised constructions.

Why Was the Scheme Introduced?

The roots of this scheme trace back to the Real Estate (Regulation and Development) Act (RERA), implemented by the Central government in 2017. RERA was designed to bring transparency and regulation to the real estate sector, which had long been plagued by violations and unregistered projects. One of the key requirements under RERA was the registration of real estate projects where the land exceeded 500 square meters or where more than eight flats were being developed. Unfortunately, this strict regulation left many ongoing and completed projects outside the registration deadline, putting buyers in a difficult position.

"Several buildings, including apartment blocks, failed to get registered under RERA," an official explained. This resulted in buyers not being able to take possession of their homes, even as they continued paying loan EMIs. In response, several states, including Tamil Nadu, had introduced one-time measures to regularize unauthorised constructions. Puducherry has now followed suit with a similar scheme announced on September 12.

How Does the Scheme Work?

According to the notification, the number of unauthorised buildings is too large to consider demolition. Demolishing these structures would lead to social disruption, which is why the regularisation scheme offers a practical solution. However, the public has been given 30 days to submit any objections or suggestions to the Chief Town Planner of the Town and Country Planning Department.

To apply for regularisation, property owners must submit their applications online, along with essential documents like proof of payment, building plans, and site plans. The process includes a non-refundable fee of ₹5,000 for residential buildings and ₹10,000 for other types of structures. The Planning Authority will examine the applications to ensure that each building meets safety and security criteria, such as road width, parking facilities, fire escape routes, and waste disposal systems.

However, outright violations that exceed the tolerances set by the authorities will not be considered for regularisation.

Boosting Government Revenue

While this scheme provides relief to buyers and developers, it also stands to benefit the government treasury. According to officials, the one-time regularisation method is expected to generate around ₹400 crore in revenue. Applicants for ordinary residential buildings will be required to pay ₹750 per square meter as a regularisation charge, while mixed-use and multi-storey buildings will have to pay ₹1,000 and ₹1,500 per square meter, respectively.

The revenue generated through this scheme will be set aside in a separate corpus fund dedicated to infrastructure improvements in the Union Territory. Committees will be formed to oversee the allocation of these funds across the four regions.

A Win-Win for All Parties

For the hundreds of apartment blocks that have been stuck in limbo, this scheme offers a way forward. Buyers will finally be able to take possession of their homes, builders can get their projects officially registered, and the government will have a significant boost to its coffers.

As one builder explained, "The introduction of this scheme is a welcome move by the government. It will help resolve long-standing issues with unauthorised buildings while giving the government a financial boost. However, we do have some concerns about certain aspects that could lead to rejection of regularisation applications." In any case, this initiative is a much-needed step toward resolving the challenges that have plagued the real estate sector for years. The hope is that it will create a more streamlined process for handling unauthorised buildings and, in turn, improve the transparency and efficiency of the real estate market.