It would be wrong to assume housing societies are preferred by buyers only in big cities where space is premium and buying an independent residence might not be an option. Even in Tier-II cities of India, group housing is gaining popularity for the benefits it offers homebuyers that are otherwise not available. For one, living in a housing society means there is round-the-clock security service available for your benefit—in an independent home, you will have to pay a bomb to be able to do that. There are so many other pressing arguments that could be made in favour of investing in housing society flats. Those who have already formed an opinion in favour of society flats and are eager to invest, must now note that they would need to acquire a number of NOCs, the short form used for no-objection certificates, to buy such a property.
Let us have a look at those documents.
One of the many benefits of living in a housing society is that you get to enjoy a great number of amenities there. However, to provide those amenities to you, the developer needs to acquire several NOCs himself—from the construction stage to the handover-phase, builders have to get at least 50 approvals from various government agencies. If your developer does not have an NOC from the electricity department, for instance, he would have to largely depend on private sources to supply power. The same is true of water, too. While all these things could be privately managed, they would shoot up the bill for the developer who would pass it on to you in the form of hiked maintenance charge. Make sure your developer has all the approvals in place and there are no ongoing issues between him and any government departments.
About under-construction property
In case of an under-construction property, an NOC must also be taken from the banks that are the financers of the project. This would ensure they will not be able to challenge the sale in future. In light of several recent developments where builders have gone insolvent and banks are dragging them to the court to recover money, this becomes an all-important document. In case of any future trouble between the two parties, this document would safeguard your interest as the buyer.
Importance of RWA
The law makes it mandatory for the housing societies to form a residents’ welfare association. These legal bodies enjoy great power in terms of sale and purchase of property. As a home buyer, you will also need to get some NOCs from these bodies as well. In case you are buying a resale property, an NOC by the RWA is required, saying it does not object to the ownership transfer. In case you are taking a home loan, the bank would demand this document before sanctioning the loan.
The case of a resale flat where the seller is still servicing a mortgage, his bank would have to issue an NOC that all dues with it have been cleared.