A hassle free apartment or a flat or a house is fast getting extinct from the city.
Tamil Nadu, being the most urbanized state in the country with 48.5 per cent of its people living in urban areas, has a very huge task of providing housing to almost 3.6 crore people living in urban areas alone.
While providing housing for the population is a challenge for the State Government, the process of buying and owning an apartment itself has become a never ending nightmare for the consumer.
Since 1947, the process of buying an apartment has had only a lone legislation enacted in the name of Apartment Ownership Act 1992. The act, unfortunately, covers only a very minimum area of the process of buying and owning an apartment.
An illustrative break-up of cost for an apartment with average selling cost of Rs 6,500 sq ft is as follows:
- Cost of the Land – 50 per cent (At the rate of Rs 1 crore per 2400 sq ft with FSI of 1.5)
- Cost of Construction – 30 per cent (At the rate of Rs 1,750 per sq ft)
- Cost of Registration – 5 per cent (8+1 per cent for UDS, 1+1 per cent for construction agreement)
- Cost of Taxes – 1½ per cent (4 per cent Service Tax on Construction Cost, CMWSSB/TNEB)
- Gross Profit for Developer – 13.5 per cent (Including Overheads, Interest on Capital & Construction Cost, Income Tax & Net Profit)
The demand for urban land, delay in approvals, corruption at various levels and greediness of the land owners contribute to the high cost of land.
Increase in cost of materials, lack of availability of construction workers etc, also contributes to the increase in cost of construction.
Increase in the cost of registration and taxation, TNEB, CMWSSB, Connections, Service Tax, VAT has contributed to the increased rate of the property.
Lack of clarity in documentation, registration, taxation, services provided/not provided by the developer has contributed to the confusion and uncertainty over the entire process of buying, owning and living in an apartment. It is high time we have a comprehensive legislation providing clear definitions, roles, rights, limitations, obligations, duties & guidelines covering all the stake holders.
The role of the builder, landowner, consumer, approval authorities, tax authorities, registration department should be very clearly defined without any ambiguity. This would provide the consumer an easy, efficient, economic, safe and secure process of buying, owning and living in an apartment. It is worth recalling that the proposed Real Estate Regulatory Act (RERA 2013) enacted by the Central Government covers only ONE stake holder – that is the developer. The act does not provide a comprehensive legislation where nine out of the ten stake holders are left uncovered.
Maharashtra Apartment Ownership Act 1970 has been a guiding force for various states such as Karnataka, Punjab, Haryana and New Delhi in formulating a very clear legislation which provides all the above requirements in a simple and easy manner in their respective states.
A swift and detailed enactment of an Apartment Ownership Act by Tamil Nadu state in the above lines could be a blessing for the people of the state. Tamil Nadu can still stand tall not only in urbanisation but also redefining urbanisation through such measures.
Source – The Hindu