Arvind Yadav/Mint
Arvind Yadav/Mint

DYK: Property regularization is important

Once an area gets regularized, the government provides necessary infrastructure in the area.

The Delhi government is planning to regularize 900 unauthorized colonies in the state. At least 1,600 colonies in Delhi alone need regularization, according to government data.

What is regularization?

An area is regularized when its land usage is changed. Usually, such areas are the ones that are illegally occupied; once they are regularized they become legally habitable. For example, an agricultural land or perhaps a river bed may be used for residential purposes by a group of people; such pieces of land cannot be used for residential purposes under law. In such cases, the government may choose to regularize the area, in view of the population or other factors, making the hereto unauthorized colony a legal one.

In Delhi, for example, a lot of “lal dora" areas were regularized to accommodate the growing population, as a result of which the city boundaries have been expanding over the years.

Why is it important?

Once an area gets regularized, the government provides necessary infrastructure in the area, such as roads, water supply and setting up of a drainage system, besides establishing educational institutions and hospitals in the area.

Moreover, a recently regularized area usually sees significant price appreciation since it becomes a legal property for the local development authority.

This also means that prospective buyers can get a home loan for such a property; banks do not give loans for properties in unauthorized colonies and areas .

What should you do after regularization?

Existing owners: Once an area is regularized, the owners are required to get their properties registered and pay property tax accordingly. Failing this, the area would remain outside the scope of city planning and remain unauthorized. For example, some “lal dora" areas remain so because the residents were not inclined to pay property tax.

If you have extra floors than what is allowed, during the regularization process, you would have to pay extra lease rent or conveyance charge and get the necessary permission from the authority. However, the authority has the all the rights to demolish the extra floors if they do not sanction the already built floors.

Prospective buyers: If you want to put money in an unauthorized colony, assuming it will become authorized in the future, consider the associated risks. Converting a colony to an authorized settlement depends on the availability of resources such as funds to build infrastructure around it and government policy.