The registration of apartments in Chennai and other parts of the State has come to a standstill from December 1 after the State government’s announcement of single document system with composite valuation methodology for apartments, according to the Associations of builders in the State.
Addressing media persons on Thursday, CREDAI National South Zone vice president S.Sridharan said there has been a steep increase in registration charges by almost 140% from March to December 2023 which is a huge burden on home buyers. “As registration of apartments have stopped completely, the housing industry has come to a standstill,” said Mr.Sridharan.
Credai Chennai president S.Sivagurunathan said home buyers were not closing deals, owing to lack of clarity after the announcement on December 1. “The implementation of the new system will have a severe negative impact on homebuyers, particularly middle-class and first-time buyers, who will now be priced out of the market. This will lead to a decline in housing affordability and a decrease in the overall demand for homes. It is evident that, in its eagerness to enhance revenue, the Registration Department is expediting significant changes without fully contemplating their implications. This rush with one week’s notice has raised uncertainty,” he said.
“We strongly urge the government of Tamil Nadu to reconsider the current composite valuation methodology, address the concerns outlined, and work collaboratively with stakeholders to develop a more efficient and equitable system,” he said.
“Our request is 4% for registration charges and stamp duty for affordable housing and 5% for all the other categories without any slab. We would like to clarify that the opinions and concerns raised by the developers were not at all considered and have been completely ignored in the decision-making process. While the meetings were convened to discuss the possibilities of implementing a new property registration system in Tamil Nadu, the home buyers’ interests have been completely overlooked. We strongly urge the government of Tamil Nadu to reconsider the current composite valuation methodology, address the concerns outlined, and work collaboratively with stakeholders to develop a more efficient and equitable system,” said Mr.Sivagurunathan.
Suggesting the implementation of the single documentation system after April 1, 2024 based on consultations with all stakeholders, the members of the Associations of builders said the government should also consider the legal implications before implementing the new system.
Pointing to the representation made to the government, the members of the Associations expressed concern and disagreement with the single document system with composite valuation methodology for apartments, which was implemented on December 1 for both High Rise Building (HRB) and Non-High-Rise Building (NHRB).
“We believe that this system will have a detrimental impact on both homebuyers and the real estate industry as a whole,” the representation said.
“The composite values published by the government appear arbitrary and lacks a clear scientific basis. The implementation of the single document system, effective December 1, 2023, lacks the essential groundwork required for its seamless execution. The system, designed to be based on a composite value comprising both land and building assessments, demands a meticulous fixation process,” the representation said.
After December 1, a new system to execute a single document with composite valuation methodology for new apartments was introduced by the State government
Before December 1, builder used to execute two documents – construction agreement with respect to buildings and sale deed with respect to undivided share (UDS) of land — for the sale of new apartments
Builders at the press meet on Thursday stressed the need for a sale agreement between the buyer and builder, which will be recognised by banks for home finance, before they execute a composite sale deed after completion of the building. Currently, the legal documentation for the composite sale deed is not clear, builders said.
