Promoters by their shrewd planning contribute sky scrapers
with attractive elevations to the city's face lift. Hence they are playing the
leading role of building a 'Global city'. But the sad news is that the
Government machineries are not equipped to develop the city to take it to the
status of a 'Global City'. The Government boasts of providing quality
infrastructure every time to a city. However the quality of the infrastructure
from the Government is such that a good road becomes a bad road within a couple
of months. In spite of such a situation promoters continue to play their role
even as the problems which they face is never ending. The promoters in
Bangalore too are no exception. Like promoters in other parts of the country
the apartment promoters in Bangalore too continue to face many difficulties.
It is very
difficult for a promoter to acquire land with proper title. Most of
the titles pertaining to land, on which apartments are built, are not 100%
perfect. Purchasing land falling under the CMC and on the developing outskirts
is risky as it may lead to prolonged litigation or some authority may find that
the land is suitable for acquisition for the purpose of laying roads, bridges
etc. Once the final notification is announced, it is next to impossible for
the owner to get the same returns, if the project fails on account of defective
title. This apart, in a number of cases Government department personnel themselves
present fake records as authentic.
Then there are a maze of laws, rules
and regulations, which the promoter has to comply with for the construction of
an apartment. Most of these laws are so complicated that different courts
interpret them differently. As a result there are several contradictory
judgments on the same point of law. The promoter tries to comply with one law
after the other but the chain is long enough to exasperate anyone trying to get
to the end of it. Government officials take advantage of the law, which is in
their favour, in taking decisions but often ignore the other provisions of the
law.
Construction on certain categories of land requires NOC of
the Bangalore Development Authority. Getting BDA permission is not an easy
task. There is no law that can force the BDA to give its decision within a time
frame. You will have to wait for how long nobody can tell you. Here's where
money speaks. Open your purse and take out currency notes, you will then see a
miracle. Illegal becomes legal. In expectation of this loosening of purse
strings the BDA will not reject your application straight away even if it is
not in order. Rather, it will make you wait till you open your purse.
The Government for developmental purposes may have notified for acquisition certain
types of land that were used for agriculture and other purposes. Even after a
lapse of 25 years, Government may not have taken possession of the lands as
these are in various stages of litigation.
The owners of such lands are very happy to see a buyer or a
promoter just because of the fact that they get
hundred times more money from the purchaser than what the pittance government
pays them by way of of compensation.
Once the purchaser starts construction
work on such lands, troubles start one by one. He will have to walk through the
corridors of various courts for decades, to set right the damage and loss
suffered by him. Whether he will succeed or not only time will tell. In the
end, wisdom dawns on him that the system does not encourage true
entrepreneurship.
Various statutory authorities want to enjoy power without
the statutory responsibilities that go with it. Usually they avoid taking
statutory decisions and if by chance they did and thereafter anything went
wrong they would find a scapegoat in the higher or lower echelons of the
organizational hierarchy. While the authorities are very prompt 'in collecting
stamp duties, they do not take the legal responsibility of ensuring that only
properties with proper titles are registered. Irrespective of the rules, the
sub-registrars are always ready and willing to register the property provided a
deal is struck successfully, if not they will raise various objections against
registering the property.
According to certain rules, one cannot purchase the land
granted by the government to a person belonging to the schedule caste. If
anyone purchases such a land, the government may direct him to return it, but
the chances of getting back the money invested are remote.
Certain land laws are odd and very
confusing. According to Karnataka Land Revenue Act, only an agriculturist can
purchase agricultural lands but his annual income should be within two lakhs
per year and he should be an agricultural
labour.
Probably, this peculiar law is in force only in Karnataka
and Kashmir. Kashmiris can buy land anywhere in India, but people of Indian
origin of other states cannot buy land in Kashmir. While
the government can acquire any land and form layout by
paying a nominal compensation to
the landowners, promoters or developers or individuals cannot do so because
there is no provision in the law to make private layouts even though they are
ready to fulfill all the terms and conditions imposed by the authorities. What
is right for the government is not necessarily right for others.
Agricultural lands located at green
belt area cannot be used for any building construction. Conversion of the land
use in green belt is not possible. However, they are entitled to construct pump
set room and small farmhouse.
Another peculiar rule is with respect to the "change of
land use." A shopping complex cannot be constructed on a land earmarked
for residential purposes. An industry cannot be set up on a land earmarked for
commercial use. Lands around Bangalore within a radius of twenty kilometers,
have been declared as "Green Belt " area on which no buildings can
come up. Similarly, no construction is allowed other than what is mentioned on
lands earmarked. Likewise, an apartment block cannot be constructed on a site
allotted by the BDA. If the permission to change the use of land is denied,
then the project can never see the light of day.
Even if the promoter is able to cross
over all the hurdles and manage to get a proper land for construction, his
problems do not end there. He has to collect various documents to perfect the
title deeds such as betterment charges, clubbing of khata, etc. To regularize
the property, the promoter has to put in great efforts at the revenue
department. Thereafter he has to get
the plan sanctioned
by the engineering department.
The plan has to move up from the Junior Engineer level and after passing
through various cadres of engineers it finally reaches the commissioner
level. After the building plan is sanctioned, the promoter has to obtain the
'certificate of commencement' and finally 'completion certificate' from the
concerned authorities.
Getting the completion certificate from the Bangalore
Mahanagara Palike is not an easy task. One among a hundred flats can get the
completion certificate. The work cannot be completed unless and until the
promoter parts with a huge amount of
'speed money'. 'No money - no
certificate’ is the unwritten slogan. None of the authorities will respond to
your application within a fixed time frame if you do not 'take care' of them.
In short, public administration has now come to mean public harassment. Delay
in getting clearance and approvals leads to escalation in the cost of
materials, wages and administrative overheads, which eats into the promoter's
wafer thin margin. Apart from the BDA and the BMP, there are several others the
promoter has to contend with. Various squads such as BDA squads, sales tax
squads, income tax squads, revenue squads, KTPCL vigilance and inspection
squads, prevention of unauthorized construction squads, swoop down on the
promoter to collect their periodic 'mamools.' Whether the promoter makes money
or not, these people definitely do. The Lok Ayukta has already nailed some,
but many are still at large fleecing the entrepreneur.
The promoter has to shell out nearly 25% to 40% of the
project cost as bribes and government fees. Then he has to earn something in
the thin margin by way of profit. As a result, there is bound to be deviation
from the sanctioned plan, compromise on standard construction, bad
workmanship, poor finish and delay in completion of the project. That some
buildings come crashing down now and then will bear testimony to these realities.
Then there are cases of missing files and bogus documents.
Added to this are cases of genuine documents executed on bogus stamp papers. A
promoter with such professional qualification
as a Bachelors, Masters degree in architecture or
civil engineering learns that his learned knowledge is useless when it comes to
getting clearances, approvals from government officials.
They learn that the only way to get their work done depends
on how successful they are in warming the hands of the officials 'under the
table.' Normally, promoters are not in a position to invest the entire amount
on their projects. It all depends on the amounts they have been able to collect
from customers. Some customers don't pay promptly. Sometimes to make up the
deficit, the promoters have to borrow funds at high rates of interest.
Promoters are forced to pay compensation by the consumer forums to those
customers for the delay in the project. On the delayed payments, however, it is
difficult for the promoters to collect interest as such rights can be enforced
in civil courts only which is a long drawn process. Of course, a few
unscrupulous promoters do make fast bucks by throwing ethics to winds.
Under the circumstances, only those few promoters, who
have the capacity to hold on to their apartments till they get high prices, can
survive in this business. Those promoters who desire to construct apartments
and budget flats for middle class citizens at reasonable prices are struggling
hard to make both ends meet.
Unless attitudes change and the bribe culture is rooted out,
it will be difficult for the quality conscious and value-oriented promoters
to survive in the market.
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