Tamil Nadu real estate series Part 2: Realty rots in Chennai as rampant bribery makes regularisation a method to pelf

Editor’s note: This is the second of a four-part deep dive into the murky world of land legislation in Tamil Nadu, unauthorised constructions and how corruption is rampant in the sector with no government wanting to curb it. Will the courts at least do the needful?

When 51-year-old Nirmala bought a piece of five-acre land in 1997 in Manapakkam, she had to run from pillar to post to get a patta document. Twenty years later, the struggle is still on. “It’s all about what you can cough up under the table,” she says.

The land was bought under the Urban Land Ceiling Act, which was later scrapped in 1998. Regularisation rules did not take into account plots like these. Despite paying electricity bills and property tax through the years, the application for patta barely moved. With the change in governments, finally ending in a limbo after former chief minister Jayalalithaa’s death, all work has stopped. The situation has aggravated today when she realised that Manapakkam had come under CMDA jurisdiction five years ago and panchayat approvals counted for nothing.

Image courtesy moneycontrol

Image courtesy moneycontrol

“The problem is, the revenue department, the DTCP (Department of Town and Country Planning), none of them coordinate generally. But when it comes to bribery, they coordinate very well,” she says.

Sale deed, patta, layout plans and an encumbrance certificate must be furnished with an online application for the regularisation of the plot. The application must be submitted before 03 November, 2017, which, with the volume of unapproved flats going up to lakhs, is likely to be impossible to furnish within the date. Most unapproved layouts fall under the jurisdiction of the Directorate of Town and Planning Commission, as they are on the outskirts of the city where real estate is booming. But Nirmala cannot regularise her plot.

As was debated in the Madras High Court based on ‘Elephant’ Rajendran’s petition, in the case of the plot falling on an agricultural land, a No Objection Certificate (NOC) must be obtained from the Tahsildar stating that the layout does not obstruct waterways or irrigation channels. This NOC, according to sources in the sector, can be easily obtained by bribing the Tahsildar an average of Rs 3,000.

Open Space Reservation (OSR) is the next major loophole. OSR is usually earmarked at 10 percent of the total plot area and is set aside for common area purposes for lower income groups towards the government. Playgrounds, schools and parks are usually constructed on the OSR area. But this is all on paper.

According to a promoter who declined to be identified, here’s how layout promoters want to make the most out of the OSR. They buy back the 10 percent from the government, which makes a fat revenue, to build more plots in the area.

This happens with both approved layouts and unapproved layouts. But what’s the main difference between an approved and unapproved layout? Both are approved but by different parties.

“The DTCP is meticulous. It will ask for a road width of 40 feet though they are lackadaisical with the OSR. All layouts will be examined and scrutinised by principal officers. But this process can take over six months. If DTCP gives the green light, the layout is officially approved,” the promoter says. This approval, however, is not without a generous amount of bribing along the way.

First, Rs 35 per sq ft is paid to personal assistants of inspectors, then to the inspectors, for approvals and finally, to ministers. The price surges to a Rs 40-45 per sq ft during election time.

Electricity connections for small plots range from Rs 10,000 to Rs 15,000 per plot. After completion application by the DTCP, another bribe of Rs 10,000 is required.

Another form of unofficial approval, which direly requires regularisation is panchayat president approval. In the first part of the series, the process of unofficial approvals is explained, where panchayat presidents alone grant approvals without involving the DTCP. This process has fooled many people into buying what was sold as approved plots and layouts.

For panchayat approvals, the process can be fastened upto two months with a bribe of Rs 5–6 lakh to bypass DTPC approval. For subdivision of plots, panchayat presidents’ charge per kitchen, which is usually counted as a single room. “No house has more than one kitchen, unlike a bedroom or bathroom,” explains the promoter. This racks up the bribe cost to Rs 40,000 per layout.

“For a patta for a large layout over 10,000 sq ft, the bribe can go up to Rs 10 lakh, inclusive of electricity costs, encumbrance certificates and water facilities,” the promoter said.

A case Nirmala brings up rings familiar to the situation that prevails in Velachery. “In Manapakkam, there were many plots behind which a river ran. Landfill is done on the river during summer as it is usually dry during the season and the pattas were granted to the plot owners. When the floods came in 2015, all the homes on the plots were flooded and people had to move elsewhere. The area is now orphaned but the river remains silted with the landfill obstructing its usual flow,” she says.

The layout promoter must ideally apply for regularisation if two-thirds of the land in the unapproved layout has already been sold before October 2016.

Now, another big expense for buyers of unapproved plots and layouts (which they did not know was unapproved) is the government order which has put forward development and regularisation charges in addition to the various bribes paid along the way.

Regularisation charges are Rs 100 per sq m in city municipal areas, Rs 60 in municipal areas and Rs 30 in areas covered under the town panchayat.

Development charges per sq m are Rs 600 in municipal corporation areas, Rs 150 in town panchayats and Rs 100 in village panchayat areas.

Those who have paid development charges already to the panchayat presidents will not receive any adjustments in the charges and will have to pay development charges for regularisation on top of the charges already paid. The government has been completely silent on this, despite the outrage from home owners.

One major question involved the lower socioeconomic strata. What happens if a poor person holding a small piece of land in an unapproved layout has to pay this amount of money within a period of six months for regularisation? Those from remote villages cannot access the internet to send an online application for regularisation. What happens to them?

In the case of Nirmala, the government has the freedom to withdraw electricity connections from unapproved layouts and plots. But what about those holding continuous possession of the property for a period of more than 21 years and those paying prompt taxes?

“The problem is, we’ve constructed in over 70 percent of the Old Mahabalipuram Road area, and only 40 percent have even been occupied. This is going to hit a lot of small developers and independent plot owners. It won’t even touch the bigwigs of the real estate sector in Chennai,” says another source from the sector.

Shyam Sunder, an advocate who specialises in property law asks, “Why should innocent buyers have to pay hefty sums when the government in the first place permitted the registration of these areas and are complicit in these violations?”

Watch this space for part three, where we examine how the menace of land grabbing and the failure of the special cells to tackle them.