Are Home Buyers Near The Okhla Bird Sanctuary Eligible For Compensation?

The Ministry of Environment and Forests (MoEF) recently announced that the ecologically sensitive zone (ESZ) around the Okhla Bird Sanctuary will be within reasonable limits. According to the notification the MoEF approved, the ESZ will be up to 100 metre from the eastern, western and southern boundary and up to 1.27 kilometers from the northern boundary of the sanctuary. Earlier, the National Green Tribunal (NGT) had ordered that construction within 10-km radius of the sanctuary must be halted. This is expected to be a huge relief to home buyers in Noida, because it is estimated that around 1,00,000 apartments were being constructed in the area. The NGT order is estimated have led to a loss of around Rs 3,500 crore.

If your flat was not up for possession on time because of the delay due to litigation related to the ecologically sensitive zone, will you be eligible to get compensation from builders? It depends on many factors:

•  In many cases, flats were not up for possession on time, purely because of the NGT order in October 2013. In such cases, builders would not have to compensate home buyers. For instance, if the construction of a flat was expected to be completed by January 2014, the builder would not have to pay penalty, if construction was completed on time. This would be true, even if the builder could not get occupation/completion certificate on time and flats were not up for possession till the MoEF approved the notification.

•  On August 19, Environment Minister Prakash Javadekar said that within a week, the notification on the ecologically sensitive zone would be issued. After this is done, the Noida authority would be able to give certificates to builders. Builders would then be able to hand over fully constructed apartments in Noida to home buyers. The Noida authority will issue occupation/completion certificates to 27 stalled projects in the area. But, all allottees of residential and commercial projects around the sanctuary will have to clear all dues and obtain a “no dues certificate” before they apply for the occupation/completion certificate.

• In many cases, buyers started defaulting on payment to builders after the NGT order. In such cases, builders probably would sell the apartments after construction at a much-higher price. Amit Modi, CREDAI's Vice-President for Western UP recently said that it would set a bad precedent, if builders compensated buyers with irregular payments. This would also be unfair to buyers who were regular with payment, he said. In such cases, it is highly likely that home buyers might not get their flats because it is more profitable for builders to refund buyers and sell their flats at a much-higher price. The price of apartments around the sanctuary are likely to rise soon because the MoEF's approval of the notification is likely to stimulate economic activity in the region, with the population density rising. The price of real estate in Noida would rise.

• According to home buyers, there is a huge disparity in the costs builders and buyers suffered in this period. For instance, annually, builders have to pay 18-20 per cent of the amount they are expected to pay builders because of the delay, as penalty. But, builders are expected to pay Rs 5-10 per square feet, which would be about three-six per cent of the amount, annually. If a conflict emerges, this is likely to work in advantage of home buyers.

•  If the construction date of your flat was before the NGT's order, the builder would not have to pay penalty if the construction was finished on time. If it wasn't, he would be expected to pay penalty for the delay. If the construction was to be finished after the NGT's order, the builder would be expected to pay penalty only till the date to which construction was delayed. The builder would not pay a penalty for the delay due to the NGT order. If the flat is still under-construction, the builder would not be allowed to hide behind the excuse that the delay was due to the NGT's order.

•  It is possible that the builder was denied occupation/completion certificate for reasons unrelated to the NGT order. Home buyers can find out the reasons why the delay happened by filing an RTI with the Noida authority. If the delay happened for reasons like, say, not having electricity connection, builders would be expected to compensate home buyers for the delay. 

Read our earlier articles on the controversy related to the ESZ:

Okhla Bird Sanctuary Decision: Relief At Last For Noida Home Buyers

Know About Eco-Sensitive Zones Before Buying Property

Okhla Sanctuary Controversy: Relief Ahead For Noida Homebuyers?