Nowadays, we hear or read about delay in construction of real estate projects more often than ever and immediately start blaming the developer for the reason. What we fail to notice is that the builder himself is not solely responsible for the delay. A realty project requires several approvals before it hits the market and even in the process of its completion. But are these approvals readily available to the development companies? Unlike what we perceive, getting approvals from government authorities is subject to several setbacks and red-tapism.
In Maharashtra, the government has come up with a good news for the developers. It has asked the municipal authorities to cut down the number of approvals needed for a real estate project. For the purpose, a larger part of the approval process is going online. It includes the clearances required from local bodies, urban land ceiling and land records for a greater transparency in the transactions. The Municipal Corporation of Greater Mumbai (MCGM) will now be IT-enabled. Builders can register for a particular approval or NOC online and from the date, a time limit will start for the approval process to be completed. The planning authority will take the decision within 30 days and other timelines will be properly laid down. Also, an incomplete registration will not be considered valid.
As of now, the approval cycle in Maharashtra real estate includes the following:
Intimation of Disapproval (IOD)-This is not one, but a compilation of many approvals. A builder has to get about 40 IODs to be eligible for applying a commencement certificate.
Commencement Certificate (CC)- This is the approval that kick-starts the construction of a project. It is divided into two types- one till plinth level and other beyond plinth level.
Occupancy Certificate (OC)- This makes it legal to occupy the building but is not the final and ultimate document.
Certificate of Building Completion- This is the final copy the developers have to receive in order to fully occupy the structure and connect it with the public utilities. The architect of the project writes a formal letter to the authorities stating that the construction has been done according to the set standards of the area.
The records of applications for such approvals show a major backlog. Out of the total 1,500 projects that entered the system for approval, only 730 were granted the OCs and BCCs. And several projects that may have received the IODs could not have been able to reach the consecutive stages. Only 4% of the total applications could reach the final stage of receiving BCC and it is a shocking figure.
The government took this step of easing the process to cope with such delays and to get going with the process of pending approvals. It is a major relief to the builders who are stuck in this red tape of municipal authorities.
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