Government Set to Take Strict Measures Against Illegal Plots in Telangana

The Telangana State Real Estate Regulatory Authority (TS-RERA) has decided to take serious action against illegal land schemes and has introduced strict measures against developers who are illegally selling undivided shares (UDS) of land in real estate projects. 

Such sales would result in severe fines — up to 10% of the total project cost. 

Certain developers/builders/promoters have been noticed to be advertising/marketing/selling units in un-divided lands in projects?at nominal or discounted prices.  

This is not in accordance with the provisions laid down in Section 3 (1) and 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.  

As per the circular by Somesh Kumar, Chairman of TS-RERA, selling the UDS lands, with no prior project registration with the TS-RERA, will entice penalties of up to 10% of the total project costs, in line with Section 59 of the RERA Act 2016. 

Government Takes a Serious Note of Illegal Land Schemes 

Earlier this year, the issue of mushrooming UDS projects was observed after industry insiders described it as "Ponzi schemes" which were flown to cheat buyers. Under this scheme, a small portion of land – such as 100 square yards of a 10 acre property is sold to the customer for an upfront payment ranging from Rs 30 lakh to Rs 50 lakh (on an average). Once the entire parcel of land has been developed, the buyer will be promised a built house or apartment against this kind of purchase. 

Although these projects must be cleared up by the authorities concerned in accordance with the various sections of the RERA Act, market observers say that the majority of the projects are not permitted. 

In addition to advising builders of such default, recently a new circular also provided by RERA chairman cautioning the public against the purchase of such buildings or plot units because the risks of such developers or promoters are very high. 

Real Estate Sector Welcomes Move 

The guidelines were welcomed by experts of Hyderabad real estate sector, which said that the safeguarding of the image of the "Hyderabad Brand" would require strict measures. It will not only help genuine developers and the whole industry, but will also protect buyers against duplication. It is highly appropriate that the government should heavily against offenders, said Credai-Hyderabad, president, P. Ramakrishna Rao.

By:Shailaja K