Noida authority changes land allotment policy

NOIDA: The Noida authority on Friday in its board meeting changed its land allotment policy that led to the ongoing crisis in realty sector. Instead of the 10% of total land cost, now a builder will have to pay 40% of the cost to get a group housing plot.

The policy was changed because the authority is struggling to recover ₹25,000 crore from builders and other land owners in Noida. Thousands of homebuyers in around 80 housing projects have not been able to get their registry executed and move into flats as the builders have failed to finish projects, citing dip in sales.

As per the ongoing policy, a builder used to deposit 5% of the total land cost as reservation money and 5% as allotment money to get a group housing plot. The authority subsequently recovered the remaining cost in 16 half-yearly instalments.

“We have changed the policy to benefit homebuyers, who have to suffer if the builder failed to clear land dues on time. Now a builder will have to deposit 40% (10% reservation money and 30% allotment money) of the total land cost at the time of allotment. He will have to pay remaining 60% in four years,” said Alok Sinha principal secretary of UP industrial development department and chairman of the Noida authority.

Officials said that the authority has given four years for the builders to clear remaining 60% land cost because by that time a housing project will also get finished.

In 2006, the authority had the policy of allotting land to builders with 40% onetime payment at the time of allotment. The remaining land cost was to be paid in four years.

But in 2007, the Bahujan Samaj Party government changed the policy, allowing allotment to builders only with 10 per cent down payment.

“This 10% policy led to the ongoing crisis because of this policy many inexperienced property dealers and politicians also bought group housing plots and failed to finish the projects thereby troubling buyers,” said a senior Noida authority official.