Unapproved or Unauthorized development is a warning sign of unsystematic, unplanned growth in urban areas. They are growing like mushrooms day by day. Without the authorization of the authorities, number of residential and industrial colonies are coming up. These colonies are a big vote bank for many so able to get the basic civic amenities like water supply, electricity, sewerage etc. These are not the part of master plan regulations and accommodate underprivileged urban middle class families. In these unapproved colonies (UAC’s), the buying and selling is not possible with the registered documents as per the law.It is a kind of an agreement between the owner of the property and the buyer.
Contrary to UAC’s, in an authorized colony the transfer of ownership is registered under the Registration Act of 1908. An authorize colony follows the legal norms and hold the clear title of their property along with the map given by Municipal Corporation. General Power of Attorney (GPA) is a tool by which an individual gives an authority to manage one’s property but in case of approved plans of properties the execution is only possible with registered documents as per the state law. Imperfect property title is not allowed and also the buyers and sellers cannot avoid the stamp duty and the registration charges. The houses in Authorized plan are constructed with permanent materials like cement, bricks etc and have advance civic amenities and social infrastructure.
A process has to be initiated to regularize the unapproved colonies, so as to make them legal, registered with the authorities and the property titles with them are recognized with the law. Various rules for regularization are developing across the county. To be eligible for regularization a colony must have:
Thanks to the initiative taken by the central and the state governments who decided to all the registrations of the properties. People living in the unauthorized colonies waited a long for the settlements regularized by the government. The initiative to provide better physical and social infrastructure, minimum civic services and community facilities is a great step towards the development. As a part to regularize the land is re-designated to individuals as residential and plot owners so that hey can register the deed of conveyance and clear the title to the property. This will help lots of property owners to get their properties registered.
Banks/ NBFC’s/ HFC’s make a deep investigation before giving a home loan. They ensure that the property to be funded is legal and have a clear title. While regularization, the borrowers need funds to get their properties legal with clear titles. But what until the property is not approved? Do they get loan from the Banks/ NBFC’s? What are the norms and difficulties to be faced before the regularization to avail the loan? What will be the rate of interest (ROI)? What about the processing fee? (Know more about the difference between Bank’s & NBFC’s)
There are Banks/NBFC’s/ HFC’s those who provide loans to both approved as well as unapproved properties. However, the interest rates can vary from organization to organization and higher from the normal Rate of Interest (ROI) for unapproved plans. ROI also depends on the property type an individual wants to buy and the income documents available.
Funding an approved property is all a hassle free job both for the lender as well as an applicant. Banks/NBFC’s provide a platform to bridge the gap between the consumer and the developer throughout the country. Nothing can beat the joy of having our own home. To fund an approved project an individual just need a complete set of documents, a good credit score and sufficient funds to fill the ‘margin’.
There might be a situation where the plot or house falls in an approved planned city criteria but the owner has done some construction without taking the permission from the authorities. To minimize the risk regarding a loan on such properties Banks/NBFC’s do give loan but the Loan to Value (LTV) and the Rate of Interest (ROI) is very high as compared to other authorized construction.