A recent announcement by Chief Minister Prithviraj Chavan that it is no longer mandatory for flat owners and housing society residents to get no-objection certificates (NOCs) from builders while selling or transferring their property has come as a major relief for the common man. But the decision has left developers with little elbow room.
Sources say builders fear the possibility of owners selling their flats at prices lower than the prevailing market rate as this will mean they will no longer be able to dictate terms to buyers.
A prominent city builder, who did not wish to be identified, explained, “Say I sell a flat to a buyer at Rs 10,000 per square feet and within a year the market price goes up to Rs 15,000 per square feet. What if an owner decides to vend his or her flat at a rate lower than Rs 15,000 per square feet? This will directly impact my sales. In such cases, the first to ditch the builders would be investors.”
Manohar Shroff, a Navi Mumbai-based developer and a prominent member of Maharashtra Chamber of Housing Industry (MCHI), said, “This is like not letting the builder choose whom he should be doing business with.
We aren’t saying that a transfer fee be paid to us, but at least we should have a say in who is going to stay in the building constructed by us. Tomorrow if a buyer resells his property to some anti-social element then who would be responsible for this? So an NOC from the builder should be compulsory for transfer of property. We will even make a representation before the CM about the issue.”
Another builder who didn’t wish to be named claimed this would even take away the exclusivity that many developers offer clients. “Certain builders construct flats for a particular community, or for people of a particular age group. What if an owner sells his apartment to someone who is not a vegetarian while the other residents of the society are? Who will keep a check on such matters? Many such buildings exist in Mumbai.”
Explaining why builders had come up with this NOC clause, realty expert Ajay Chaturvedi said, “This was to dissuade investors from selling the stock in open market. But then many builders started using this as a tool to extract extra money from buyers. However, now as this illegal procedure has been discontinued, investors would be able to sell their flats at rates they feel are appropriate. This is likely to impact property pricing in the state.”
Sources say the government issued an official communication in this regard after coming across cases where developers illegally collected money from flat buyers for providing such NOCs. State housing minister Sachin Ahir said, “Obtaining NOCs from builders used to be a huge headache for apartment owners. Developers used to charge money according to their will. With this regulation buyers will be free to do as they please and builders can no longer behave like Big Brother.”