Constructing or reconstructing a house in Hyderabad: Key points to consider

Hyderabad’s real estate presents diverse opportunities for homebuyers and investors – from residential plots to apartments, villas and independent houses. The booming IT sector and expanding infrastructure have opened new avenues for development. While the core city areas are saturated and offer limited scope for new construction, the emerging suburbs of Hyderabad offer significant scope for new development owing to land availability. Even within the city, redevelopments take place extensively to meet the growing property demand. Moreover, ageing buildings, structural safety and modern layout preferences are other factors driving redevelopments in Hyderabad. Many people prefer investing in residential plots for building their dream home. When undertaking any construction project, compliance with local regulations is a must. In this guide, we explain the key considerations when constructing or reconstructing a property in Hyderabad.

Construction vs reconstruction in Hyderabad: Key differences

Real estate developments involve two approaches: the construction of new buildings or structures on a plot of land, and the redevelopment of buildings. Hyderabad is one of the top-tier cities witnessing both construction and reconstruction activities aimed at meeting the growing demand for space.

New construction refers to the development of a structure on a vacant plot, from scratch. Typically, new developments occur in areas with ample land, such as city suburbs. These developments conform to the city master plan prepared by the Hyderabad Metropolitan Development Authority (HMDA).

On the other hand, reconstruction or redevelopment involves repair or rebuilding. The process primarily involves demolishing the existing structure. Redevelopments are mostly done for old, dilapidated buildings or those with poor layout or compliance issues. Reconstruction is beneficial, especially in the city’s established areas, as it creates a new supply of properties to meet the ever-increasing housing demand.

Things to consider before constructing a property in Hyderabad

Before undertaking any construction or reconstruction activity in Hyderabad, there is a basic process that must be followed, which involves meeting certain legal requirements.

#1. Estimating costs

Any real estate construction project will involve high costs. So, it is important to estimate the potential expenses and plan a budget. Make sure to account for unexpected expenses. The major costs incurred in a construction project include:

• Construction materials and labour costs
• Legal expenses, including stamp duty and registration charges
• Government-related costs such as permits, utility connections, etc.
• Architectural and design costs
• Interior design and home-related expenses

Allocating at least 10% of the total budget for unforeseen expenses can help prevent financial losses from factors such as weather-related delays or material shortages. Moreover, taxes levied by state and local governments account for a significant portion of the total cost of home construction. These include stamp duty and registration charges, property taxes etc., utility installation expenses, etc. Further, construction costs depend on location. The construction cost per square foot is lower in rural areas compared to urban areas.

To ensure the construction project does not exceed the estimated budget, prior planning and judicious resource allocation are a must. One can also consider home loans for house construction to manage the construction costs.

#2. Legal due diligence

Proper legal due diligence must be carried out before starting construction or reconstruction work. The process involves verification of land use and ensuring compliance with the HMDA Master Plan 2031. That is, it is necessary to check whether the plot is meant for residential development. Further, due process must be followed for the conversion of land by submitting an application to the state’s revenue department.

Further, verification of various property-related documents helps prevent potential legal issues. Some key documents to check include:

• Title deed
• Mother deed
• Encumbrance Certificate (EC)
• Khata certificate
• Layout approval
• Land-use verification (HMDA)

#3. FAR (Floor Area Ratio)

The Floor area ratio (FAR in real estate) or floor space index (FSI) is a numerical figure set by the local government that indicates the maximum floor space that can be constructed on a plot of land. Hyderabad is the only city in India with no FSI cap. While the FSI average in other cities ranges between 2 to 2.5, Hyderabad has a higher value. This implies that developers can create more space on a given piece of land. However, these values are subject to revision. Hence, one should check the FSI values before planning construction projects.

#4. Building norms

Obtaining building permits has been digitalised in many cities. The Greater Hyderabad Municipal Corporation (GHMC) and the Hyderabad Metropolitan Development Authority (HMDA) are responsible for creating and enforcing building bye-laws in Hyderabad. The GHMC issues building permits, under the GHMC Act of 1955, for properties within its jurisdiction. Moreover, the Telangana Building Permission Approval and Self-Certification System (TS-bPASS) provided by the Telangana government enables a single-window system for clearances. That is, a single application is used for getting different approvals or NOCs.

The various clearances required for construction projects include NOCs from departments such as fire services, revenue, the Airports Authority of India (AAI), the National Monuments Authority, traffic police, irrigation, and urban land ceiling, among others. The new system enables faster clearances for applicants.

There are different TS-bPASS approvals based on different criteria:

• Instant building permission approval through online self-certification – for plot size up to 500 square metre and height up to 10 metre (Residential)
• No building permission or occupancy certificate required for plots up to 75 square yards and for the construction of ground or ground-plus-one floor (Residential). Applicant must only register with token of Rs 1.
• Single window system for obtaining multiple NOCs using Common Application Form and approval through online self-certification – for plot size above 500 square metre and height above 10 metre (Residential & Non-Residential)

#5. Building approval process

• To apply for GHMC building approval, one must submit an application form along with relevant documents and the required processing charges.
• The ACP (Assistant City Planner) reviews the submitted application form and also visits the actual building site.
• The application will be reviewed at various levels, including by the Additional Commissioner and the Commissioner, along with the Building Committee.
• The Building Committee reviews the proposals and will either reject, approve or recommend a plan revision.
• After the Building Committee approves the submitted plan, the applicant must pay the GHMC building permit charges.

#6. Documents required to get GHMC

For building construction above a height of 10 mts:

• A legally approved building application by the builder, owner, structural engineer or architect.
• Auto CAD designs of the building to be submitted in a PreDCR format, including the location or site plan, terrace, rainwater harvesting pits, mortgage plan duly signed by the builder, owner, architect, surveyor or structural engineer. Accurate representations of every floor, building elevations, parking floors, etc.
• Primary fee of Rs 10,000.
• Disclosure forms signed by the landlord and verified by the Gazetted Officer.
• A license copy of a structural engineer, builder or architect attested by a gazetted officer. 
• The latest encumbrance certificate issued by the registration department. In case of an existing structure on the site previously sanctioned, a copy of the same is required.
• The latest receipt of the GHMC property tax
• NOC and approved plans from the fire department, for constructions of 10 meters and above.
• Report of the soil test
• NOC from AAI (Airport Authority of India)
• Structural durability certificate attested by an accredited structural engineer
• Joint undertaking from builders, owners and licensed technical personnel.

For building construction below a height of 10 mts:

• Legally approved building application form by the architect, owner, or engineer.
• Auto CAD designs of the plan to be submitted in a PreDCR format. Plans for the location or site plan, terrace, rainwater harvesting pits, mortgage plan signed by the builder, owner, architect, surveyor or structural engineer. Accurate representations of every floor, building elevations, parking floors, etc.
• Primary fee of Rs 10,000.
• Disclosure forms signed by the landlord and verified by the gazetted officer.
• NOC and approved plans from the fire department for constructions below 10 metres.
• Building use certificate issued by HMDA.
• Structural durability certificate attested by an accredited engineer.

The GHMC follows a timeline for issuing the approvals. The process is generally completed within 21 days from the date of receiving the online application. However, the process may take longer if additional NOCs are required.

#7. Government authorities to notify

Before initiating any house construction project in Hyderabad, the following are the sanctioning authorities that one may have to contact:

•   GHMC (Greater Hyderabad Municipal Corporation) for building permissions
•   HMDA (Hyderabad Metropolitan Development Authority) for approvals
•   Government of Telangana for TS-bPASS approvals
•   Telangana State Southern Power Distribution Company Limited (TSSPDCL)
•   Hyderabad Metropolitan Water Supply and Sewerage Board (HMWSSB)

Redevelopment in Hyderabad

Redevelopment in Hyderabad will primarily involve the demolition of the existing building. The relevant permit and NOCs must be obtained from the GHMC and other agencies, respectively. Supporting documents such as ownership proofs, photographs of the existing building, structural verification reports, etc., will be required. One should engage a licensed contractor for demolition activities in compliance with GHMC norms. Further, in case of an occupied property, the residents and neighbours should be notified. Proper legal process should be followed, such as providing alternative accommodation.

Housing.com News Viewpoint

Construction or reconstruction in Hyderabad opens new avenues for potential buyers and investors. However, compliance with the local regulations is essential to avoid any penalties or legal consequences. Prior planning and budgeting, along with awareness of the city’s construction regulations and building norms, will help prospective homeowners avoid costly mistakes. One can also consult a legal professional to gain clarity on various legal aspects of house construction.

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