Builders miffed with confusing BDA regulations

Steep hike in security deposit, misinterpretation of total covered area are keys contentious issues

Real estate players are miffed over new regulations imposed by Bhubaneswar Development Authority (BDA) on them which they fear may cripple the sector in the state.

As per clause 7(1) of BDA Planning & Building Standard Regulations 2008, the applicant for apartment buildings and commercial buildings having 300 sq mt (square meter) or more of floor area shall have to deposit a refundable non-interest-earning security deposit at the rate of Rs 100 per sq mt of floor area, which was amended in 2013 and the rate was fixed at Rs 500 per sq mt of covered area.

Builders allege that the BDA officials are deliberately misinterpreting the total covered area as total built up area and 'illegally' forcing the applicants to deposit the security deposit on the basis of total built up area instead of covered area.

As per the BDA rules, the covered area is defined as area covered immediately above the plinth level by the building in respect of ground floor, with certain exclusions.

As per National Building Code of India 2005, the covered area is defined in clause no 2.26 of Part 3 as "Ground area covered by the building immediately above the plinth level." Builders said that in simple terms, the covered area equals the plot area minus the area due for open spaces and it clearly states that the covered area cannot be more than the plot area.

"When the definition of covered area in the prevailing regulation, rules and NBC is such, the BDA officials are deliberately misinterpreting it as total built up area and are illegally forcing the applicants to deposit the security deposit on the basis of total built up area instead of covered area which is a clear violation or contravention of the prevailing Rules and Regulation", they alleged.

Builders said that security deposits charged by other authorities are Rs 50 per sqm of floor area in Chennai, Rs 25 per sqm in Bengaluru and Rs 10 per sqm in Navi Mumbai. It is nil in Delhi and Kolkata.

"BDA should come out with more clarity on the definition of covered area. The chances of misinterpretation is likely as area covered immediately above the plinth level by the building, as in the definition, is not clear as whether these are the floors or not", said D S Tripathy, governing council member, Credai (The Confederation of Real Estate Developers Association of India).