Govt amends Apartment & Property Regulation Act, makes 100% ownership of title mandatory for conversion of land use

The Punjab Government has made it tougher for developers to default on projects on account of land ownership, development charges and delay in timely delivery of projects to buyers. It has amended the Section 5 of the Punjab Apartment and Property Regulation Act, 1995, notifying that any promoter developing a land into a colony will have to furnish the complete title of the project land (100 per cent ownership) in favour of the company to get permission for conversion of the land use (CLU) from the competent authority. A separate permission will be necessary for each colony.

Earlier, not less than 25 per cent of the project land and registered agreement for the rest of land with other owner was required. The Department of Housing and Urban Development amended Sub-Section (1) of the Section 5 of the Punjab Apartment and Property Regulation Act, 1995, with an intent to check land disputes between promoters and landowners, curb stalling of projects, and to ensure timely delivery to buyers.

Further, a developer would have to deposit 25 per cent of the total amount of the external development charges (EDC) upfront to the competent authority within 30 days of issuance of the letter of intent. Earlier, the government allowed the payment of external development charges before the grant of licence.

The amendment also helps to secure the payment of external development charges by mandating that the promoter would furnish bank guarantee equivalent to the balance amount of 75 per cent and interest on it or would execute hypothecation/mortgage deed for the property of equivalent value at 90 per cent of the collector rate, from within the project concerned in the name of the competent authority.

The Department of Housing and Urban Development notification, dated December 5, mandates that in case a developer defaults on payment of the external development charges and development of internal works of any project, then no fresh approval to such developer would be granted in the future till the time all dues were cleared.