Road Side Properties
Precautioinary measures to be taken before purchase by the investors
Cities are undoubtedly becoming cauldrons of development, demanding fast paced upgrade in the quality of existing roads. May it be the National highways or the State Highways or even Major District Roads, they have seen massive development, fuelling a sudden rise in the prices of the properties abutting them. There is a rush of the investors wanting to invest on these roadside properties which hold immense potential for development to yield higher returns.
However, extreme care and caution should be exercised before acquiring such properties given the kind of pitfalls that these properties pose and in some cases the investment may prove to be disastrous. Hence, it is advised that professional advice is sought while finalising such a deal. Factor that needs to be looked at while contemplating to purchase a roadside property is the vulnerability of the land for compulsory acquisition in case of widening of road.
This vulnerability is also coupled with several other factors like the affect of drainage, rain water storm construction, service lines like electricity underground cables, water pipelines, gas pipelines etc.
The common concerns are listed in a question format and answered as hereunder:
1. What are the general precautions to be taken while purchasing roadside properties.
In the case of vacant sites, make sure that the land is privately owned having clear marketable and valid legal title thereto. Many a times, the owners of small strip of road side properties encroach the road margin lands which is owned by the government left as “road margin” for future development. Over a long period of time, the adjacent private land owners have enclosed these lands by constructing compound wall and pose as if the same is in their possession. From the eyes of law, they are called as unauthorised encroachment and any length of time cannot legalise the same. It being a public property can be evicted summarily by the governmental authorities by invoking special laws and powers without paying any compensation. So, make sure that the property is excluded from road margin and for this purpose get the property measured by the well experienced and competent official surveyor having regard to the government survey documents like FMB etc. This will make sure that you are paying only for what is legally sold to you and not for road margin government land.
Secondly, in the case of buildings abutting to the road, even if they are built long back, still the land and the building remain unauthorised construction and they are liable to be demolished and no one can claim any kind of compensation even if the building has got door number, electricity supply and water connection. So, one has to make sure that the property being purchased does not include road margin lands, the ownership whereof is vested with the government.
2. How do I ascertain that the road side land under purchase does not belong to the government?.
Carefully examine the title deed under which the seller claims right over the property and make sure that the boundaries mentioned therein tally with the physical condition and the same shall be read in conjunction with the survey sketch annexed to the title deed, if any. Also get the property measured by the official surveyors as provided under the survey laws and regulations. Make sure that the authorities who maintain the roads like the National Highway Authority, State Highway Authority or the PWD etc are consulted in writing about the same.
3. Is it sufficient if I take their opinion and verify the sketch available in these public authorities?
It is advised to take written opinion and seek their consent or no objection letter before acquiring such lands.
4. Do the authorities have an obligation to give the opinion in writing? How can I obtain the same?
Yes. They have an obligation to give correct reply. For this purpose invoke the provisions of the Right to Information Act, 2005 and the Rules framed there under by submitting an application along with the sketch depicting the actual condition of the site and seek specific answers for your queries.
5. Apart from road margin issue, are there any other aspects to bother about?
Yes. The issue of road widening is something that all investors have to look at critically. Almost all National and State Highway are getting upgraded , redeveloped under different models like PPP, BOP, BOOP etc. and these roads are being transformed from two lanes to four lanes and in some cases even six lanes. Hence, most of the roads are already in the process of land acquisition and some are under widening proposal. In the case of land acquisition being conducted, lands cannot be alienated and any such alienation will be null and void. Hence, make proper enquires with the special land acquisition officers who are in charge of the land acquisition for highway [Both N.H and S.H] and also the other officials concerned.
6. Where can I contact the Special Land Acquisition Officers?
It depends. However, the easiest way of finding such officers are by approaching the office of revenue authorities like Deputy Commissioners [ District Collectors ], Assistant Commissioners [ Sub Collectors ] and Tahsildars. Also, the National, State High Way authorities and specifically PWD’s. Local government surveyors can also throw some light on the same. So, never hesitate to approach all the authorities concerned. Unfortunately, there is no single office or nodal agency wherein you get complete information.
7. Does it hold good for roads inside the municipal limits also or only the National and State High ways?
Even the roads running inside the corporation and municipal limits are in the process of being widened and one can find the same in the city master plans being approved by the urban development bodies like BDA in Bangalore, MUDA in Mangalore in addition to Corporation and Municipal councils.
8. What are the other potential threats of which one should take note of before purchasing these road side properties?.
Most of the investors are not aware of the fact that before constructing any building on the road side, even though in the private property, certain set back has to be left which varies from National Highway, State Highway and major District or Panchayath roads. It varies from 40 metres to 22 metres. The local planning Engineers will be in a better position to guide the buyers to take note of the Master Plans or CDP’s etc.
9. Is there any data bank or official publication available in this regard to study?.
Unfortunately, most of the times, these publications [even official ] are not readily available for citizens’ scrutiny. As the buyers go by the advice of real estate brokers than subject matter expert professionals like Advocates, Planning Engineers, there is very little awareness on these aspects. Hence, every time, it is advisable to file an application under R.T.I specifically showing the details of the properties which are under consideration for acquisition by specifically mentioning the survey number, village, extent etc duly supported by approved survey plans. This forms important part of Due Diligence. What is important to note here is that only authentic and competent legislation and government orders having the force of law shall be looked into. Advocates are better professionals to be consulted in this connection.
10. Are there any other things that we should be really worried about?.
Yes. One should also take note of the service or civic amenities lines like water supply, underground electricity cables, drainage lines, storm water or rain water drains [ open or closed] as they will also have impact on the value and utilisation of the lands. On this, the local engineers will be in a better position to advice. So, it is just not enough to consult an Advocate on the legal and valid marketable title, but also involve the engineers and planners as the importance of taking opinion of multi level professionals is increasing.
The FAR or FSI issue can also be a major problem. This is determined by the developmental or municipal or regulatory bodies. Though these are developmental aspects they do have direct bearing on the commercial and real estate value when the land is going to be resold or offered as security to banks or financial institutions at a later point of time. The local practising architects will be in a better position to guide as the same varies from location to location and street to street based on certain parameters like width of the road, nature or classification or zoning of the land etc.
11. What if the land is acquired for widening of road? Will I not get compensation?
Yes. You will get compensation. It is a matter of legal and constitutional right. But, the compensation is determined on the basis of guideline value as fixed by the authorities. The real transaction value is hardly reflected in the deed of sale or title deeds. It is heavily undervalued to save stamp duty and in case of compulsory acquisition. In some cases, compensation is paid in Transferable Developmental Rights [TDR’s], which is in the form of a certificate and one can realised the value only by selling the same in the open market. Mostly the builders are interested to buy. This is again in the clutches of real estate cartel and certain vested interests. Hence, compensation may not be adequate and commensurate to the loss of land.
12. What are the measures to be taken after purchasing the lands abutting to the public roads?.
Firstly, enclose the property by constructing compound wall after obtaining license from the local authorities. Most of the people are under the impression that no license is required to build compound wall. This is important for protecting the property from encroachment and to also ensure that no one puts up any hutment or petty shops in front of your land blocking the road margin. It is better to put temporary fencing in-between your land and road margin to prevent unauthorised occupation of the government road margin land. Even though you will have absolute right to gain access to the public road from any point of your property, the enforcement thereof becomes extremely difficult once vested elements encroach the road margin land blocking your frontage. It is advisable to put up a small shed in the land and obtain door number for the same as that can give some practical benefits during land disputes and to establish your exclusive physical possession over the same in case of litigations or disputes or rival claims. It is not mandatory or absolutely essential but, highly advisable.
13. Who are the professionals who should be consulted in this regard ?.
Advocates, Chartered Accountants, Planning Engineers / Architects, Surveyors will be able to guide from different perspective.
14. Which are the departments one has to deal with generally ?
National and State Highway Departments, P.W.D, local self governments life Municipal Corporations, Town Municipalities, Village Panchayaths and developmental authorities like Urban Development Bodies, Electricity Corporations, Water Supply, Drainage boards / departments etc.
Therefore, it is advised that special care is taken while looking for properties abutting to the public roads. It is better to take the professionals to the site and closely examine the proposal from all angles and do not confine the importance to just pricing and legal documentation. This will save an investor from many future risks.
Vivekananda Paniyala,
Corporate Lawyer,
Mangalore.
Writer can be reached via: vivekanandapaniyala@gmail.com
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