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Lessons to be learnt from the Campa Cola crisis
An errant builder doesn’t lose anything but the property buyer could lose everything. Don’t get trapped in an illegal house, note Neha Pandey Deoras and Yogini Joglekar.
In 1991, Nandini and Ajay Mehta bought an apartment each and then merged the two, for a 1,300-sq ft plush flat on the 10th floor in the Midtown Apartment tower of the Campa Cola compound in the Worli area of Mumbai.
The Mehtas run individual businesses from their offices in Worli.
At the time, builders PSB Construction, Yusuf Patel and BK Gupta had promised the couple and many of their neighbours that they would soon get the occupation certificate.
Today, both the Mehta flats have been termed illegal.
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Lessons to be learnt from the Campa Cola crisis
Of the three builders, two are no more; the third refuses a helping hand.
The Mehtas had bought the house on a loan taken from a leading private bank, which they repaid some years ago.
Back then, banks disbursed home loans without an OC; now a borrower has to produce one and, at times, also the blueprint or layout of the building to get a home loan.
Unfortunately, the 100-odd flat owners of this society never got the OC, though the society has a clear title deed. In 2005, the BrihanMumbai Municipal Corporation issued the first demolition notice, to residents who owned flats beyond the fifth floor of each tower.
The residents got a stay order from a court; in 2010, the court ended the stay order.
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Lessons to be learnt from the Campa Cola crisis
The case went on and in 2013, the Supreme Court permitted the residents to approach the BMC for help, which the municipal body denied. November 11, 2013, was set as the date for demolition.
Nandini, who has not attended work and is running from pillar to post to save her house, says their flats were sold at the prevailing market rate; mostly, a house without an OC is sold at 10-15 per cent lower than the market price.
And, municipal bodies charge 20-25 per cent more than the retail rates for water and electricity supply.
Today, the Mehtas and many of their neighbours have nowhere to go.
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Lessons to be learnt from the Campa Cola crisis
Of the 100-odd flats set to be demolished, many belong to senior citizens who are surviving on pension income and not all might be able to afford an alternative accommodation.
Illegal constructions are rampant in Mumbai and probably in many other cities.
So is selling or buying a house without an OC.
Property experts say it works on the chalta hai or ho jayega premise.
In 2010, a government survey indicated around half of the close to 500,000 unauthorised constructions in the Thane district of Mumbai alone were on government land, including 500-odd acres of Maharashtra Industrial Development Corporation land.
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Lessons to be learnt from the Campa Cola crisis
In 2005, a survey found the Mumbai suburb of Ulhasnagar had a little over 100,000 illegal buildings.
In the same year, the high court ordered Ulhasnagar Municipal Corporation to demolish 855 unauthorised ones.
In 2006, the Maharashtra government stepped in and enacted a special law regularising unauthorised structures constructed prior to January 1, 2005.
Even buildings that violated fire and structural safety norms were allowed to be regularised but for a premium.
Citing this example, there were many attempts to regularise unauthorised buildings across the country.
The HC had then said UMC’s case should not act as a precedent for other corporations.
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Lessons to be learnt from the Campa Cola crisis
In 2006, the HC asked the Kalyan-Dombivli Municipal Corporation to act against some 67,000 illegal structures.
The state government proposed a special law for the KDMC area but the HC restrained the state.
Other areas around Mumbai like Thane have a large number of illegal constructions, housing hundreds of thousands.
Earlier this year, Union agriculture minister Sharad Pawar said these buildings should be regularised, as done in Ulhasnagar earlier.
Nandini argues that when the builders had paid a penalty for the illegal parts during the construction period, how could the authorities issue a demolition notice?
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Lessons to be learnt from the Campa Cola crisis
In 2006, the HC asked the Kalyan-Dombivli Municipal Corporation to act against some 67,000 illegal structures.
The state government proposed a special law for the KDMC area but the HC restrained the state.
Other areas around Mumbai like Thane have a large number of illegal constructions, housing hundreds of thousands.
Earlier this year, Union agriculture minister Sharad Pawar said these buildings should be regularised, as done in Ulhasnagar earlier.
Nandini argues that when the builders had paid a penalty for the illegal parts during the construction period, how could the authorities issue a demolition notice?
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Lessons to be learnt from the Campa Cola crisis
The residents can rope in the BMC officials, state government and the builders who are responsible for this situation.
While the builders flouted norms despite being fined, the BMC did not follow up the case beyond a point.
“The Campa Cola residents can claim for damages for their losses if their homes are demolished.
“There are chances the residents can get their flats’ resale value to an extent if they ask for it.
“The residents can also ask the state government to accommodate them in the vacant Mhada flats,” says Jagtap.
Buying a house is a cherished dream and involves saving with your teeth.
You won’t even want to imagine a situation like the Campa Cola Compound.
Therefore, be careful when buying one.
Lawyer Sandhya Sondhi says there are many things buyers can be careful about.
For instance, ask if the builder has clear title deeds for the property on which flats are built.
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Lessons to be learnt from the Campa Cola crisis
For this, you could ask the builder for an Intimation Of Disapproval and a Commencement Certificate, which makes it clear that the property you are purchasing is built on undisputed land and is BMC-approved.
In case the builder cannot provide an OC at the time of possession, ask for the reason(s). Most commonly it is because the builder has over-used the floor space index he was permitted or there is deviation from the approved plan.
You can identify violations early on.
While the Campa Cola case was a glaring divergence, some violations might be small and difficult to detect.
Like consumption of excessive FSI, the building being higher than permitted, flouting of Coastal Regulatory Zone and air space regulations, projects built without environmental clearances and illegal utilisation of mandatory open spaces around buildings.
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Lessons to be learnt from the Campa Cola crisis
Therefore, property lawyer Vinod Sampat says it might be a better idea to buy a completed house than an under-construction one.
It would also help to visit the municipal office and get clarity on title of the plot, exact land use under the development plan and zoning requirements.
This will help ascertain the authenticity of the approvals, NOC from CRZ, air space, defence and proximity to hazardous industries and so on.
The agreement given by builders need to be vetted by lawyers to ensure it is clear of any non-compliance.
Not everyone can do all the homework required before making the big decision.
Therefore, it is advisable to approach lawyers who help with homework on housing projects.
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Lessons to be learnt from the Campa Cola crisis
If you can’t afford a lawyer alone, you could do so in a group, to cut on the cost. Group home buying sites like Pune-based Home Buyers Combine and Mumbai-based Groffr.com also offer such services if you buy through them.
JUDGE’S WORDS IN ULHASNAGAR CASE
“Either we have an urban development law or illegality.
“If you want illegality, throw the law into the sea.
“The state is not only a mute spectator but a collaborator in this huge scandal.
“The law-makers are protecting the law-breakers here.
“Is the government so impotent that it cannot take care of the law and order situation and demolish illegal buildings?”
UNAUTHORISED AND COUNTING
2008: More than 50,000 unauthorised structures found in Kalyan-Dombivli by a civic survey
2010:
- Government states 493,000 unauthorised buildings in Thane district
- Brihanmumbai Municipal Corporation probing over 80,000 illegal constructions since 2010
- 20,000 buildings and 500 towers got demolition notices in Navi Mumbai
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Lessons to be learnt from the Campa Cola crisis
CHECKLIST
- Do your due diligence on the builder and the project before buying a property
- Ensure the builder has clear title deed, no-objection certificates from Coastal Regulation Zone
- See that the seller has paid all his income tax dues
- Read the builder-drafted agreement, ensure it is registered; get it vetted by a lawyer
- Insist for clear and marketable title certificate; check the property card for the status
- Ensure you have an occupation certificate, completion certificate before possession
- Buying a ready property is safer than an under-construction one
- Ensure you are compensated if the seller terminates the agreement or if the possession is delayed
