How To Get A Building Permit In Delhi, Gurgaon And Noida

December 4, 2016

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In this blog post, Mohammad Farooq, a fourth-year law student at Institute of Law, Nirma University, describes the procedure for obtaining a building permit in Delhi, Gurgaon, and Noida.

The Indian construction sector is one of the major contributors to the growth of the nation accounting for more than 19% of the GDP. It is also the second largest source of employment employing about 33 million people. Several industries like steel, cement, technology, skill-enhancement, etc. are directly affected by the changes occurring in this sector. With the introduction of GST, 100% FDI in construction, governmental schemes and projects like affordable housing for all by 2022 and smart cities project, the infrastructure and housing projects will see a spurt in growth in the coming few years.

Despite all this, the international reports present a gloomy picture that is in sharp contrast to the domestic statistics. India stood at a lowly 184th position globally in 2015 in getting construction permits, 130 out of 183 countries in ease of doing business and 138th in the ease of property registration in World Bank’s Ease of Doing Business (EODB) report. Obtaining the required construction permits for starting any project or building a residential or commercial property is considered to be a herculean task in India. There are myriad causes for this and all of them revolve around the convoluted procedure of getting construction permits, approvals, and clearances. Let us examine the intricacies involved in the procedure for obtaining construction permits in Delhi, Gurgaon, and Noida to get a fair bit of idea about what incorporates the construction process.

Obtaining building permits in Delhi

The Building Bye-laws 1983 have been adopted by Delhi Development Authority, and the same is applicable to the development works undertaken in the National Capital Territory of Delhi. All construction works are sanctioned based on these regulations. The building plan application of a residential plot, prepared by a licensed architect, engineer or supervisor depending upon the size of plots and they shall indicate their name, address and registration number on the plans with a copy of their valid license. submitted to the urban authority office along with a permit fee. At the time of sanctioning the plan, the In case of any grievance like delay in sanctioning of the application, the public can approach a “Shikayat Adalat” situated in the same building of the urban authority.

The list of documents to be provided along with the above application is different for different kinds of projects undertaken by individuals and organizations of different types, and the same is provided on the DDA website. After the completion of construction, the owner has to submit a completion notice along with the requisite set of documents. No building application is deemed valid unless and until the owner giving notice has paid the requisite fee of building applications.

After the application is received, an appropriate inspection date and time (within 10 days of receipt of application) is decided. After the inspection of the construction site, the scrutiny of the case takes place within 30 days. If there is no objection or need of compliance from the owner, then the sanction is given within 60 days from the date of submission. But in case there is any objection/compliance, the same is to be dealt with within 30 days post which the building permit is issued within 15 days from compliance. However, in the case of non-compliance or failure to comply, the building permit is disallowed/refused. Further, it goes without saying that any falsification or misrepresentation of a material fact may lead to revocation of the permit given. After the building permit is issued, the owner has to notify the authority within 7 days of starting the construction work and obtain an acknowledgment of the same. Again, after the completion of the work, the owner is supposed to intimate the authority about the same through the licensed architect, engineer or supervisor along with the requisite documents and fees. In response, the authority inspects the property and submits objections, if any to the architect/engineer/supervisor. After all compliances to the objections are met and all formalities fulfilled by the owner, an occupancy certificate is issued by the authority. Only after the owner receives this occupancy certificate can he reside in the building.

Misuse of the building or using it other than the manner for which it had been authorized is a punishable offense under the DDA Act. Any deviation from the maximum/minimum prescribed limits, etc. will attract penal provisions like demolition or rectification at owner’s cost, in case of non-compoundable items (FAR, no. of floors, open spaces, height, etc.) while in case of compoundable items, penalty will be levied at the rates prescribed. In all other cases, a deviation of up to 10% will be allowed.

Recently, several changes have been made in the 33-year-old bye-laws in order to ease the entire process and make it faster. Now a single online application is to be made instead of approaching several agencies like the airport authority, jail board, fire department, etc. separately. There will be seamless integration so that the urban authority can later take approvals from these departments online in single window clearance thereby removing human interface and reducing the protracted time. The application can be filed online, and the payment can also be made electronically. The same is to be approved within a month. Further, the time limit for granting the building permit has been reduced from 60 to 30 days. Also, the number of documents required for obtaining the permit and the completion cum occupancy certificate has also been reduced significantly. SARAL scheme has been introduced under which for residential plots of size up to 105 sq.mtrs, the plot owner need not obtain the sanction of building plans. He/she has to just to submit an undertaking intimating about construction along with requisite fees and other documents to start construction. Several measures also need to be taken to comply with the green norms and safety norms.

Obtaining building permits in Noida

The process of obtaining building permits in Noida is similar to that of Delhi. An application is submitted along with the requisite fees and documents. The applicant, here, gets 60 day time from date of receipt of objection order to comply with the objections and if he fails to resubmit a fresh plan within this period, then fees will again be charged as per a fresh plan. The site plan should incorporate the boundaries, plot no., name, plot area, the breakup of the plot areas, FAR, height, ground coverage, drainage, sewerage, boundary, etc. The building plan incorporates floors, use of all parts of the building, drainage, sewerage, street elevation, wall thickness, terrace plans, etc.

The permit fees applicable is different for different cases. For a revised plan submitted in case of re-erection after demolition, it is 1/4th of the fresh application fees (provided that the building area is not increased in this case); for revalidating the permit for 5 years, it is 10%, and if the application is made after the expiry of validity of the permit, then the fees applicable is same as fresh one. Compounding charges will be taken form the owner in certain cases, for instance, if the construction had been started without a building permit or if the construction continued beyond the validity of the building permit. If the application is withdrawn at any time before the sanction of the plan, there would be no refund of the fees.

An authorized officer scrutinizes the application and verifies the facts, title over the land, documents submitted and then attests the same along with the owner. However, unlike Delhi building regulations, here the owner and the technical person can be held jointly and severally liable if there is any violation of the building and planning regulations and they shall have to submit an indemnity bond in favor of the urban authority. Further, if the authority finds any violation upon performing any test checks after approval of plans, then the authority reserves the right to blacklist the technical person so appointed, from the organization in which he is registered and prohibited from practicing for a period of 5 years.

The owners get leeway for beginning construction in accordance with the Zoning Regulations of Development Plan/ Master Plan, once the application has been certified by the technical person. The objections found upon the scrutiny of the plans should be addressed within 30 days from the date of intimation of such objection. On the failure to rectify the objections so raised, the authority can compel the compliance, and the costs will be recovered by the owner. If the owner fails to pay the costs, then the same can be recovered from him as an arrear of land revenue. The authority is supposed to either approve or reject the plan within 60 days from receipt of the application, and the plan will be deemed as sanctioned if the authority fails to do so. However, the owner must, in writing bring this fact to the notice of the authority within 20 days after the expiry of 60 days. If the plan is rejected, then the authority must provide the reasons for the same along with the relevant provision of the regulations that have been contravened by the plan. Further, an inspection is conducted within 30 days after the application for occupancy is submitted and if the building is found to be incomplete, the allottee will be penalized 50% of occupancy charges or Rs. 5000/- whichever is more and his/her/their application for occupancy shall be rejected. On such rejection of an application, the allottee will be required to apply afresh along with penalty charges and time extension charges if required and action would also be taken against the concerned technical person who prepared the plan. In case of violations found during the construction or inspection for obtaining the occupancy certificate, the same shall have to be rectified within 30 days from the intimation date, and if it is not rectified by the owner in the stipulated time, then the authority ensures the compliance and the costs for the same will be recovered by the owner. It is imperative to have the occupancy certificate before occupying the building, and the same is issued within 90 days from the date of receipt of the occupancy certificate application. For multi-storeyed buildings, the occupancy certificate is issued only after the examination of the Chief Fire Officer and other certificates such as fees, structural safety, water harvesting, etc. also have to be submitted along with the completion drawings.

If the application for a building permit is refused, then the aggrieved applicant can file an appeal to the Chairman of the Authority within 60 days from the date of communication of such order along with a copy of the refusal order and requisite fees. The decision was taken by the Chairman on shall be final, conclusive and binding. The chairman shall provide the opportunity of hearing to all concerned parties. Additional time to file the appeal may be granted if the reasons satisfy the chairman.

As in the case of Delhi building laws, if the owner falsified or misrepresented any material statement or fact fraudulently, then, after giving an opportunity of hearing, the permit of the applicant may be cancelled and any construction work done would be deemed to have been done without permit and action would be taken against the owner. If the concerned technical person is found liable in any manner for the same, then he too can be blacklisted and debarred.

Obtaining a building permit in Gurgaon

The basics of the procedure remains the same as seen in the case of Delhi and Noida. An application for erection or re-erection of the building is submitted to the competent urban authority with relevant documents and fees. But here, unlike in the previous two cities, the owner appoints an architect/engineer for the supervision of the construction. It will be their duty to advise the owner to stop construction incase of any violations and report it to the competent authority. If the application is rejected, then a fresh application may be filed within 60 days from the date of rejection with fresh scrutiny fees but this only allowed twice in the 60 days.

The procedure to submit application deviates in Haryana from Delhi and Noida. There is a provision for submitting the application through self-certification (for shops, shops-cum-flat, shop-cum-office, shop-cum-office-cum-flat, etc.) where a 15-day notice is given to the competent authority for approving the plan after which construction can be started if no objection is intimated. Again, as in the earlier mentioned cities, the owner will have to remove the objections mentioned by the authority and a failure to do so will lead to authority taking matters in their own hand by removing the violations and recovering the cost from the owner. Action against the defaulting architect or engineer will take place in the same manner as in the above cities. The provision for self-certification will be aborted in such cases of violations, and after scrutiny of the revised drawings and inspection of the site, completion is granted. If there is a change of owner/architect or engineer during the course of the construction, then the same will have to be intimated to the authority within 7 days, and work has to be suspended until he/she is replaced by a new person taking full responsibility of the entire project.

The entire procedure incorporating all the functions like submission of application, approval/rejection, scrutinies filing of documents, etc. is performed online. Also, there are separate committees in the authority that look after the preparation of zoning plans, approvals, violations, granting occupation certificate or any other function. The validity of the sanctions is 2 years for buildings having a height of less than 15 metres and 5 years for multi-storeyed buildings having a height of more than 15 metres. If the construction is not completed within this period, then the sanction elapses, and a fresh application has to be submitted for the incomplete portion. The applicant can apply for revalidation of the building plan in case the construction could not be started even after the expiry of the sanctioned period or submit a revalidation fee before the expiry period if construction could not be completed on time. Further, if within 60 days, the authority does not sanction/reject the application, then the building plan will be deemed to be sanctioned. Approval of the authority should be taken as per the procedure specified before any revision or alteration in the sanctioned building plan. Again, as in the earlier cities, the sanction can be revoked if any fraudulent misrepresentation/concealment of any material fact is found and in case there is any omission or complaint against the architect/engineer or owner, then they can be jointly and severally held liable.

The certificate of occupancy is granted based on the certification of the architect or engineer. After receiving the application for occupation certificate, the authority has to convey his decision within 60 days. If no decision is given, then the owner can go ahead and enjoy possession of the building. Post the grant of the occupation certificate, if it is found that building is being used against the stipulated purpose or altered or modified in any manner, then tan order for revocation of the certificate can be passed after hearing the concerned party. The same can be restored after the violations have been removed.

Thus, it is clear from the study of the procedures of obtaining the building permits in the NCR region that it is a protractracted and messy affair. The delays in the projects faced by the private individuals, builders and contractors stem from myriad reasons. Let us have a look at the major challenges faced by the construction sector in India:-

Title Search – Land is one of the most valuable asset in India owing to its scarcity amid growing population. Most suits in civil courts pertain to some property dispute, land being one of them. Therefore, doing a thorough title search before acquiring land or property becomes paramount in the real estate and construction sector. Real estate companies and developers hire solicitors, search clerks, banks, financial institutions, etc. to inspect revenue records and court orders and publish public notices (for objections) in national dailies to ensure that the land/property is free from any title defect before proceeding with the project. However, this public notice is not a statutory requirement, and nobody is bound by it. It is merely considered a prudent practice by prudent real estate developers and they cannot prohibit any objections from public raised after the expiry of the objection period of the notice.

Funding – Having a planned finance structure in place, before the project kicks off is imperative for real estate developers to avoid financial pressure later. If there is improper planning or coordination, then it leaves the all the parties including the developer, investor, purchaser or owner in a very confused situation and hence, absolute clarity as to the structure and schedule of payments is important. Further, there are different sort of risks for the investors or the company associated with the different sources of raising funds like equity/preference shares, debentures, loans, overseas borrowings, etc. When taking loans from banks or NBFCs, the borrowers have to furnish collateral security. If there are any delays or deviations in the project, then it impacts the ability to repay these loans. In this context, developers have to proceed cautiously in order to avoid charge creations.

Red-Tapism and Corruption – The two are interlinked and ubiquitous phenomena in the real estate and construction sector and directly impact the projects. According to a KPMG report, this sector is the most corrupt sector ahead of metals and mining, aerospace and defense, power and utilities. So, what are the factors that lead to this?Most of the time, the real estate developers complain about the bureaucracy and the consequent delays in getting project approvals and clearances. There are about 40 – 70 approvals required to be taken before beginning a project and according to a CREDAI report it, on an average it takes about 2 – 4 years to get through this harrowing process where the builders or owners have to run from pillar to post across different departments like the National Highways Authority of India, Airport Authority of India, Ministry of Environment, Labor Ministry, Water Board, Civil Aviation, and other sub-departments like fire department, sewage department, electricity board, water department, coastal regulations, etc. By this time the cost of land rises by 24-30 per cent due to hefty interest payments as bank loans are not available for procuring important raw material in this sector. So, companies resort to bribing and unfair practices to expedite the clearance process and overcome the bureaucratic hurdles.
Often, the builders and owners face the menace of changing rules and regulatory mandates and the frequent inspections by local bodies which lead to further delays. Getting the plinth level certificates, completion certificates, occupancy certificates and other certificates is full of hassles and add the woes of the owners and builders. Add to that, the rising rate of interests and higher costs, dearth of skilled labor and manpower costs et al are pushing the real estate prices out of the roof. Because, of all these reasons, the vulnerability to corrupt practices increases. To encapsulate, we can see that due the high level of complexity involved in large projects and contracts because of a combination of all the above-mentioned reasons, companies intentionally overlook compliances at the contractual and regulatory levels. The construction industry has been witnessing rapid growth, and the privatization of this sector saw the entry of various private players with little experience scrambling for projects and thereby resorting to unfair practices in order to succeed.
Unanticipated change of plans – At times, there may be variations in projected plan because of factors like the supply of a different built-up or carpet area than what was agreed upon or because of natural hurdles in the actual construction. This impacts the expenditure directly leading to delays, and rising costs of the project, and these unaccounted expenses are pushed to the consumers.
Risk of Default – As we saw above, because of the delays in project completion and other reasons discussed above, the repaying capacity of the borrowers is severely impacted. Consequently, there is a high risk of default involved in handling over the possession of the of the promised units to the investors and purchasers and this, in turn, leads to poor demand which in turn results in the piling up of the builder’s inventory and further aggravating the risk of default. Thus, because of the rising Non-performing assets banks are filled with trepidation before extending loans to builders who have a bad reputation in the completion of projects or who have been blacklisted by other banks. Several litigations have been filed by investors, creditors and bankers against the errant and defaulting developers which leaves the disputed property in limbo for a long time, thereby leaving the investors in a dire situation.
Taxation Problems – As discussed above, builders often have unsold flats due to the piling up of inventory built by them. They often mention them as work in progress until they are converted into income by allotting to a buyer for a full consideration, in order to avoid tax liability. Sale of property held in stock i.e. unsold flats are supposed to be treated as business income which is taxable. This creates a situation of deferred tax liability. The valuation of a work in progress is often arbitrary and leads to profits being overstated resulting in higher payment of tax, even while the company has not actually realized the income from the sale.

Conclusion

An overhaul of the system is the need of the hour as most of the projects suffer from bottlenecks and delays due to myriad reasons which has significant repercussions on the construction sector as a whole. Although some steps have already been taken in the instance of Delhi, but its effective implementation and result is still a far cry from the stated objectives.

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1 COMMENT

eashaavaasthu October 13, 2018 At 12:10 pm

Thanks for informative blog

Reply