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Did builder sell you plot he doesn't own?

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Did builder sell you plot he doesn't own?

Last updated: February 17 2012
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  • Did builder sell you plot he doesn't own?

    Chandigarh: Here's a scam warning for those who have recently bought plots and apartments from private property developers.
    The dream home you own, or the plot on which you aim to build it, may have been sold to you by people who do not even own it.

    Here's how.

    Flouting the rules, several private property developers in Punjab have sold, and are selling, plots and apartments to consumers despite not having acquired the requisite license from the urban development authorities.

    In fact, the developers only procure the Change of Land Use (CLU) papers from the town and country planning department and flaunt it as the government's “approval” to sell plots and apartments. In many cases developers have sold plots of their entire colonies without even owning a single inch of land. Interestingly, many such promoters are also openly advertising their projects quoting the CLU number.

    While the use of CLU number to sell plots is mostly being done by builders who are developing small colonies in the vicinity of the high potential zones like Amritsar, Jalandhar and Mohali, there are some mega project developers, too, who have been flouting the rules.

    And the gullible masses are falling for the trap.

    “This is happening mainly due to the fact that people do not know the difference between a CLU and a license.

    CLU is only a permission given by the government to the developer to change the use of the land. It is not an license to develop and sell the land. To sell or develop land, the actual ownership is mandatory. No one is allowed to sell plots or apartments without a valid license under the Punjab Apartment and Property Regulation Act (PAPRA) or the mega policy, whichever is the case,” said AS Miglani, chief administrator Punjab Urban Development Authority (PUDA).

    For projects of 10 acres and 25 acres, in which a license is issued under the PAPRA, the CLU can be granted to a developer for a land he does not own. However, the developer has to produce a letter of consent from the land owner stating that they intend to sell the land to the developer. Without actually owning any land, in many such cases, developers project the CLU number as the government approval. The actual approval — the license — can be procured only after the developer proves that he owns at least 10 to 50 per cent of the land.

    “In that case also the government approves selling or developing of only that land, which is owned by the builder and not for the land, which he intends to develop in the future,” said a district town planner.

    For mega projects which are either worth Rs 100 crore or which are spread over 100 acres, the CLU is given when the promoter owns 50 per cent of the land and has letter of consent from owners of 40 per cent of the land. The rest 10 per cent of land can be acquired by the government if needed. With only 50 per cent of the land under his belt, the developers of some mega projects are known to have sold the entire plot without waiting to get a license.

    The license in such cases is issued only when the developer proves ownership over 90 per cent of land.

    In neighbouring, Haryana this problem is not as rampant as the CLU is not sanctioned till the developer proves the complete ownership of the land. “Even for smaller colonies, CLU is not granted for any piece of land which is not owned by the applicant,” said T C Gupta, director general, Town and Country Planning, Haryana.

    Punjab government is aware of the problem. “We have in the recent past decided to extend some provisions of the PAPRA to the mega housing projects as well. These provisions make the projects more consumer friendly. Other than this we intend to have a monitoring cell in PUDA which will ensure that the rules laid down for the setting up of housing colonies are being followed,” said SK Sandhu, principal secretary housing Punjab.


    Did builder sell you plot he doesn't own?
    Last edited February 8 2012, 03:23 PM.
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  • #2

    #2

    Re : Did builder sell you plot he doesn't own?

    Well, this is an eye opener.
    Even I thought that CLU was "THE FINAL THING" you needed to have before deciding to put money into a project.

    Thanks for sharing.

    Comment

    • #3

      #3

      Re : Did builder sell you plot he doesn't own?

      Very good information. Its an eyeopener and a fair warning.

      Comment

      • #4

        #4

        Re : Did builder sell you plot he doesn't own?

        I have a suspicion that this post is going to cause a lot of heart burn to the developers in this region.

        Regarding the following paragraph:

        "In fact, the developers only procure the Change of Land Use (CLU) papers from the town and country planning department and flaunt it as the government's “approval” to sell plots and apartments. In many cases developers have sold plots of their entire colonies without even owning a single inch of land. Interestingly, many such promoters are also openly advertising their projects quoting the CLU number."

        Well I at least know of one developer who ALWAYS advertises the CLU number in all his advertisements. Any guesses who?

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        • #5

          #5

          Re : Did builder sell you plot he doesn't own?

          I booked a plot in Shiwalik Velley project in Sector 115 from Shiwalik group. Till now, I have been waiting for approval of plot loan as they say few documents from the builder are pending still. How to check the ownership of the land ?? They say things would be materlised within a month.

          Do we need to check only two documents :- CLU & Ownership or anything else also.

          Comment

          • #6

            #6

            Re : Did builder sell you plot he doesn't own?

            GMADA is promoting all this problems which end users face. If GMADA known then why dosnt it amend it process and go the Haryana way, in which you get CLU only after you own the Land.

            I hold GMADA as a culprit for all this. It is not that they don' know this, it is that they known this but still they dont do anything concrete.

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            • #7

              #7

              Re : Did builder sell you plot he doesn't own?

              I totally agree here with Manoj and this is something which should be educated to all investors and buyers. CLU is important but is not the final permission to sell unless the land is bought by the builder. Most builders in the region are now selling on CLU in pre-launch. This is certainly an eye-opener for many.

              Comment

              • #8

                #8

                Re : Did builder sell you plot he doesn't own?

                I think Altus in Mullanpur has opted for this approach as they are selling plots with a high pitch of CLU approval. Thank you this has been an eye opener indeed.

                Comment

                • #9

                  #9

                  Re : Did builder sell you plot he doesn't own?

                  Originally posted by Indigill View Post
                  I think Altus in Mullanpur has opted for this approach as they are selling plots with a high pitch of CLU approval. Thank you this has been an eye opener indeed.

                  There was a group that was interested in buying Altus together at a discount, did that initiative materialize?

                  Comment

                  • #10

                    #10

                    Re : Did builder sell you plot he doesn't own?

                    If a developer had Licence to develop the land, they would advertise it instead of CLU. You can be rest assured that anyone who advertises CLU does not have licence to develop the land. I would stay away from any such schemes.

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