What to do if your housing project is declared illegal?

Approach the court, use social media to bring your issue into limelight

Imagine buying your dream home liquidating crucial investments and taking a huge loan. While it’s time for you to move in, the government declares it illegal or stops the work because of developers’ fault. There are numerous such cases that come to light regularly.

In Noida, for example, developers got all the relevant permission from the Noida Authority to construct housing projects. Verifying the papers, even banks tied up builders with them to offer loans. Four years later, in 2014, as the work in many projects was nearing completion, the National Green Tribunal (NGT) stepped in and stopped Noida Authority from giving completion certificates. The reason: they were within a 10 km radius of the Okhla Bird Sanctuary, which was an eco-sensitive zone. The move affected around 50,000 flat owners.

In another case same year, NGT found that developers have not been adhering to guidelines of the Ministry of Environment and Forests (MoEF) and flouting pollution norms during the construction activity. The NGT order to halt the construction has put the fate of 20 projects (80 towers) in a limbo.

If govt declares it illegal

What can you do if caught in a similar situation? If government declares property as illegal, the only option is to approach the court. In many cases the authorities issue notices after many years have passed by. The courts take cognisance of this fact and in all previous cases they were lenient to the buyers.

The court’s underlying principle in such rulings has been that the buyer is not at fault. Though it is customer’s responsibility to first check the permissions a developer has with regard to the project, it’s not always possible for them to get a clear picture due to opaqueness in real estate matters. In most cases the courts have scoffed at the government for delayed action.

If it’s developer’s fault

The first thing to do in such a case is file a criminal case against the realty firm and its directors. At the same time, such buyer should approach consumer court and also create a pressure group. They should also use social media and go to the developer’s other projects to make others aware of the problems they are facing due to the builder.

Case studies

Time and again, across cities, property buyers have suffered similar fate either due to fault of the builder or the government stepping in after many years to declare the project as illegal. They buy the houses trusting that partner banks have verified the documents before tie-up. They keep repaying the loan without taking possession of the flat.

In 2011, for example, about five lakh residents living in the eastern and western suburbs of Mumbai were asked to shell out extra money for regularisation of their homes on land classified as private forest land. The forest department had first issued notices to land owners in 1957. Then in 2001, a Public Interest Litigation was filed by an environmentalist group. Subsequently, residents paid Rs 100 crore as penalty. Similarly, more than 1.13 lakh buildings were identified as illegal in Ulhasnagar before a special law was passed to regularise most of them in 2006.