HYDERABAD: The Telangana government is contemplating a series of revisions to building regulations aimed at reducing compliance burdens and costs within the real estate sector. These changes include modifications regarding mortgaging built-up space, building fee payments, issuance of No Objection Certificates (NOCs), project timelines, and permissible floor heights.
The proposed changes follow multiple appeals from builders and developers, who contend that current regulations have become outdated and excessively restrictive.
According to government sources, there is a preliminary agreement to lower the required mortgaging of built-up space from 10% to 5%, responding to requests from builders’ and developers’ associations. The remaining 5% would be secured through a 2.5% city infrastructure impact fee and a 2.5% security deposit under the Non-Agricultural Lands Assessment Act, thereby maintaining an overall mortgage requirement of 10%.
Representatives from the Confederation of Real Estate Developers’ Associations of India (CREDAI) noted, “The mortgage clause is specific to Hyderabad and places an unnecessary financial strain on developers, contributing to escalating housing costs. The Real Estate Regulatory Authority (RERA) in Telangana already enforces strict financial protections and mandates that 70% of project funds be retained in an escrow account until construction concludes.”
Occupancy Certificate Submission
Currently, builders must mortgage 10% of their built-up area when obtaining permissions for buildings exceeding ground plus two floors. This provision, established nearly two decades ago to ensure compliance with building norms, releases the mortgaged area only upon the submission of an occupancy certificate (OC). If any discrepancies are identified and an OC is denied, the mortgaged area remains unreleased. Developers argue that this safeguard is now redundant, as RERA already requires binding undertakings from builders to secure buyers’ interests.
The proposed modifications were discussed during a meeting held by the municipal administration department with representatives from CREDAI, NREDCO, TDA, and other real estate organizations. The state is preparing to announce new unified building rules. Key officials, including municipal administration special chief secretary Jayesh Ranjan and HMDA metropolitan commissioner Sarfaraz Ahmad, attended the meeting and agreed to evaluate several proposals.
NOC from Irrigation
Regarding the issuance of NOCs for constructions near water bodies, the government has decided not to delegate authority to irrigation assistant engineers. However, it clarified that a separate NOC from the irrigation department will not be necessary for approvals once the full tank level of water bodies is notified by the irrigation and revenue departments.
Concerning transferable development rights (TDR), the government has mandated that builders submit TDR information only after the civic body has generated the fee letter. This decision follows a recent ruling requiring a 10% TDR for structures exceeding 10 floors. Builders had previously opposed the practices of GHMC and HMDA insisting on TDR certificates at the plan approval stage, and sought permission to submit building plans with TDR floors without upfront certificates.
