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In some good news for developers and home buyers, the Union Urban Development Ministry has stipulated that housing approvals will be given within 60 days, via an online application process in metropolitan centres such as Mumbai and Delhi. This step is likely to reduce the considerable amount of time and money spent in the process and speed up construction.
Developers, naturally, are happy that the traditional method of approaching a number of government offices will now be eliminated.
“Applications for approvals will be sent online and developers can expect it within 60 days. In case the approval does not come on time, the developer or owner can file an affidavit and begin the construction process. So, this process is very linear,” points out Dhaval Ajmera, director of Ajmera Realty.
This is good news for the end-users too, as delays in obtaining the plan’s sanctions can cause delays in construction, resulting in losses for developers.
“This impacts the consumers who have booked their properties at the initial stage and have to wait for the possession for longer than assumed. This even impacts the credibility of the developers. Today, buyers are willing to pay a premium, in return for peace of mind that all approvals are in place and they are ready to invest in properties from reputed builders who are known for their quality of construction,” says Amit Wadhwani, director, Sai Estate Consultants.
Affordable housing segment to benefit
Delays in the approval and regulatory process, may even affect project timelines by up to 3 years and this is especially disastrous for the affordable housing sector. Timely and fast approvals are necessary, if supply is to be created in the affordable housing segment. Consequently, a major demand from the real estate sector, over the last decade, is for a single-window clearance system. “With a 60-day cap being put on the approval process, a strong message is being sent out that the government is very serious about enabling the creation of affordable housing stock. This will benefit the customer, as well as the developers and also take out unforeseen regulatory risks that are very often the prime reasons for project delays which affect all the stakeholders,” says Rohit Poddar, MD, Poddar Housing.
60-day cap: A step towards single-window clearances?
Several states such as Rajasthan, Madhya Pradesh and Telengana, have already instituted a time-bound clearance process of no later than 60 days.
“Developers need around 50 no-objection certificates (NOCs) for one project approval and 41 permissions from the government, which takes a lot of time. A single NOC can take 4-6 months. This approval process, through which applications will be sent online, is a step towards single-window clearances,” feels Rajeev Jain, director of Nirmal Lifestyle.
Combined with the impending implementation of the Real Estate (Regulation and Development) Act (RERA), which will put additional pressure on developers to enhance delivery capabilities, a swifter approval process will reduce the potential for time lag in meeting consumer commitments and increase transparency across the construction process, concludes Shubika Bilkha, business head, The Real Estate Management Institute (REMI).
How faster approvals can help developers and buyers
- Getting approvals for a project, is the most tedious task for a developer, who has to spend lot of time to obtain numerous permissions from government entities.
- The 60-day time limit on the approvals process, will help new projects to be started quickly and boost sales.