a senior manager in a private firm purchased a 2 BHK flat in Shivane and was
pleased with his investment. After all, he had a housing loan from a reputed
nationalised bank that had verified the property documents and the builder had
facilitated the loan process. It was only after he moved into his new flat that
he found that the builder had permission to construct only up to five floors.
His flat was on the sixth floor of the seven-storey building.
"I have been deceived like many other people. I fail to understand how a nationlised bank approved a loan for a flat on a floor that had come up without permission," Dongre said. The manager who had approved his loan is now transferred. Dongre points out that the deviations are not limited to the additional floors alone. "I have the brochure the builder gave us when we visited his office for the first time. As per the brochure, the project comprised only two buildings but more than 10 buildings have come up by now," he said.
Pitaram Complex, the building in Narhe village that collapsed on October 31, had permission for five floors, but the builder had added a sixth floor to it. Residents of this building too had taken loans from banks to buy flats here. While most banks maintain that their checks and balances are in place, a few admit that the fierce competition in the housing loan sector has led to such projects getting loans.
"Banks scrutinise all documents before
approving loans, but it is difficult for them to check if the builder is adding
more floors without permission. We give loans based on the documents submitted
to us. In the last few months, we have stopped sanctioning loans for
constructions in some parts of Pune that are notorious for illegal buildings,"
said a bank official. He, however, added in some cases banks believe builders
when they say their additional floors would also get permission.
"Banks sanction loans to illegal floors in a sanctioned building. But on many occasions, the builder just vanishes from the scene after the construction is over," he added.
Economist YamajiMalkar said that property deals through banks still remain the safest way to check illegal constructions and use of black money. "There are flaws in any system, which need to be addressed. But the state must initiate steps to ensure that all realty dealings are through banks. It is necessary to stop use of black money that is coming in Pune market," said Malkar.
The apex body of realty developers, CREDAI - Pune Metro, wants the state government to act. HemantNaiknavare, president of CREDAI said, "Illegal constructions are coming up in large numbers because people are getting homes at an affordable price. We (big builders) are not in a position to address the issue of affordable housing. The government must take initiative, but the government is not serious in this regard." Naiknavare added that CREDAI has set certain terms and conditions for its members, but it was not possible for them to keep tabs on small time and fly-by-night builders.
"Those responsible for illegal construction
must be punished, be it the builder or the government official who played a
role. The district administration must have a vigilance mechanism in place that
uses modern technology to curb illegal constructions. But it is most important
to ensure affordable housing," said CREDAI vice president Rohit Gera.
However, he added that affordable housing will remain on paper as long as land prices remain high and developers are taxed heavily. "In the last 4-5 years, land prices around Pune have escalated. There is also a heavy tax burden on customers, including VAT, LBT, service tax. As long as these issues are not resolved, there is no possibility that anyone would come forward for affordable housing projects," said Gera.
Dt. 12.12.2014. Pg. 4
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