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Although Delhi is the hub of NCR, and all development in the NCR regions is owing to their proximity with Delhi, nonetheless there is very little real estate residential and commercial development that has taken place within Delhi. There are no condominium residential (world class) complexes or grade A commercial office building in Delhi; with exceptions of only a few. There is certainly huge potential. In order to get life to a large-scale real estate development and construction in Delhi, the land pooling policy in back; and this time Delhi Development Authority (DDA), stated to be “with the objective to regularize land pooling and streamline the process of developing physical and social infrastructure on the ‘urbanizable areas’ “issued the Land Pooling Regulations, 2018 (Regulations) on October 24, 2018.
To start with, the Regulations permits ‘Developer Entities’ and, or ‘Consortium’ which are eligible groups of landowners, or entities representing a group of landowners, to pool one or more land parcels aggregating to a minimum of 2 hectares and subsequently undertake the development, be it in terms of residential or commercial societies, of the resulting pooled land basis certain stipulated terms and conditions. The essential terms include inter alia the eligibility criteria, submission of plans, licensing and approvals and also to ensure the development of roads, utilities, schools and other social infrastructure to effectuate the smart-city principles.
The Regulations allows land parcels of any size to be bought under the pooling, provided they fall in the notified areas; and they also landowners with any size of land to register and express their interest to participate in the pooling. The land has to be free from all encumbrances and the landowner should have valid and lawful ownership and physical possession of the land proposed for pooling. The Regulations prescribe that a “sector” will be considered eligible when (a) a minimum of 70% of the Development Area in the sector has been pooled; (b) such land pooled land parcels are contiguous; and (c) the entire pooled is bounded on at least one side by a 30m road.
The key guidelines under the Regulations, inter-alia, requires that each landowner should surrender land proportionately for city level services or city level infrastructure in a sector. DDA and the service providing agencies are expected to develop city level physical infrastructure, recreational and public/semi-public (PSP) facilities on minimum 40% of the pooled land on payment of EDC charges on the total pooled land. Further, the remaining 60% land is required to be utilized for the development of residential (53%) (including neighborhood level facilities), commercial (5%) and public/semi-public facilities (2%) as per sector/ zonal and master plans. However, that too is subject to mandatory buffer zones near heritage sites, environmentally sensitive sites, high tension lines etc. and height restrictions prescribed by Airports Authority of India.
The Land Policy is proposed to be implemented simultaneously in the entire urbanizable areas of the urban extension and if required, roll out of the Land Policy may be phased depending upon the availability of resources and action plan for the provision of infrastructure and services by the concerned Service Providing Agencies.
The Regulation states that the entire process will be operated through an online Single Window System established by DDA, specifically for this purpose and that DDA to phase the application process through the announcement of “Application Window” from time to time. Such Application Window to be opened for inviting applications for a fixed duration of time, providing detailed information on the process to be followed.
The Regulation allows only “Developer Entity (DE)” to be eligible for a return of separate land parcels for final development. Smaller landowners who own less than 2 hectares and who are not part of any DE, will only be eligible for built space in the developed area. The responsibility for the return of built space to such landowners will be as decided at the time of finalization of Implementation Plan. The DE/Consortium will be compensated in the form of Tradable FAR if it is unable to utilize the entire allowable FAR.
The term “Consortium” means a duly registered association having rights, duties & obligations in accordance with law, consisting of multiple landowners/ Developer Entities who have come together to pool land for unified planning, servicing and subdivision/share of the land or any other defined action for development of sectors under the Land Policy as per prescribed norms and guidelines.
In light of the submission and examination of the application and appropriate processing fee, DDA after verification by the Revenue Department, will prepare a plan at the sector level, which is an important aspect of these Regulations as the said sector level plan would specify the location of the 40% land necessarily required to be surrendered for development of city level physical infrastructure, roads, industrial, recreational and public/ semi-public (PSP) facilities and the location of remaining 60% land which would then be available for development by the Developer Entities/ Consortium.
Finally, pursuant to the successful submission and examination of the application, processing fee and compliance with the terms of the provisional development license, the Developer Entities/ Consortium will be issued a final development license.
Even though these Regulations appear to be on the right track; they are at a nascent stage and it is too soon to determine the extent to which the implementation of these provisions would impact the stakeholders and the real estate sector within the capital region. One thing is certain that our city needs world-class development and therefore it is must that these Regulations work this time!
Hardeep Sachdeva is a Senior Partner with AZB & Partners. He is a corporate lawyer with extensive experience of more than two decades and has special focus in M&A & Corporate Advisory and Private Equity across several sectors including real estate, retail, e - commerce, hospitality, health care, technology, education, infrastructure, insurance, alcoholic beverages, consumer durables, automotive products and family foundations.
Swati Singh is currently working as an associate with AZB & Partners and her practice areas include mergers and acquisitions and corporate advisory with a special focus on conducting due diligence across various sectors including real estate, healthcare, housing finance etc. and drafting of commercial agreements.
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