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Why do Housing Societies fail to Obtain NOC?

  • Published On 05-Nov-2022
Why do Housing Societies fail to Obtain NOC?

 

                              Why do Housing Societies fail to Obtain NOC?

The legality of any housing society is one of the most important factors to evaluate before investing in it. According to reports, there are 150 illegal housing projects operating in Islamabad alone. But what restricts these housing projects and their developers to secure NOC, let’s have a look at that.

Land Ownership:

If any developer applies for the NOC approval of a specified amount of land then it is mandatory for that developer to have that much land registered in his name.

Mostly it happens that the developers don’t have land directly registered in their name which results in the rejection of their NOC application.

Non Registration:

Numerous factors such as NTN, registration with SECP, and regularly paying tax (having a good profile with FBR) play a key role in the NOC approval.

Non-registration of owners or their firms may result in the disapproval of the NOC.

Credibility and Reputation:

The credibility of developers and the fame of their previously delivered projects also influence the NOC approval. This is more like the demand for a product from a specific developer; i.e. if a project by any developer receives a prominent response then the next project by that developer is more likely to get NOC approved easily.

It is also worth mentioning that political factors and affiliations may also affect the NOC approval of a project.

Selling Beyond the NOC Area:

Sometimes it happens that developers get NOC approved for a specific area, but start selling beyond the approved region. As a result, the relevant authorities cease the NOC of previously approved land too.

Empty Land Pockets:

If a developer holds land of more than a thousand kanals but there is a small region owned by any other member (this region will be called a land pocket) who is not ready to sell that may cause significant troubles for the developer including disapproval of NOC.

Lack of Masterplan:

The relative authorities require certain statistical information such as the location of certain landmarks, park sizes, specifications of the residential and commercial spaces, and much more to approve the NOC.

If an application is put forward without the master plan of the project it is more likely to get rejected as it gives rise to doubts and ambiguities.

Overselling of the Land:

The most considerable factor in the rejection of NOC is the overselling of land. This happens when the developers sell more land than actually owned land. This practice commonly takes place through a file system. On comparing the supply and demand of the project, if any such scam is found out, it results in the rejection of the NOC.