Now, builders can mortgage land to pay pending charges

Pradeep Sharma

Tribune News Service

Chandigarh, July 29

The state government has allowed the cash-strapped builders to mortgage their land with the government to part finance defaulting amount of the external development charges (EDC) and the infrastructure development charges (EDC).

An order of Arun Kumar Gupta, Director General, Town and Country Planning Department, said the amendment to the existing policy had been effected ‘in order to streamline the recovery of outstanding EDC/IDC ’.

Under the amended policy, the builder could mortgage 35 per cent of the licensed land if the outstanding EDC/IDC was more than the original EDC/IDC. In case the outstanding amount was between 75 per cent and 100 per cent of the original amount, the area to be mortgaged would be 30 per cent. Similarly, 25 per cent of the area could be mortgaged if the outstanding amount was 60 per cent to 75 per cent.

If the outstanding amount was between 45 per cent and 60 per cent, the land to be mortgaged would be 20 per cent, while 15 per cent of the licensed area could be mortgaged in case the outstanding charges were 30 per cent to 45 per cent. In case the outstanding amount was between 15 per cent and 30 per cent, the area to be mortgaged would be 10 per cent. Moreover, for the outstanding amount less than 15 per cent of the original EDC/IDC, 5 per cent of the area could be mortgaged.

In case of the plotted colony, the land to be mortgaged would be commensurate with percentage of saleable area. In case of the group housing/commercial colony/cyber park, the coloniser would be allowed to achieve floor area ratio (FAR) on the non-mortgaged land only. The coloniser would not be allowed to raise construction on the mortgaged land. However, he could start construction once the EDC/IDC charges had been paid and land de-mortgaged.

“A coloniser opting for this policy shall strictly adhere to the payment schedule under the policy. In case of default in payment of the EDC/IDC, the state government would be at liberty to dispose of the mortgaged land or any portion of the land for the purpose of recovery of EDC/IDC payment,” the order added.