Why do Housing Societies fail to obtain NOC?

The housing societies and their legality is an issue that has stirred a new discourse in the real estate market nowadays.

According to a report published by CDA, there are more than 150 illegal housing societies operating in Islamabad alone.

In such a scenario, ProProperty has listed some facts that are responsible for societies not being able to obtain a NOC and why these societies are marked as illegals by the relevant authorities.

Following are those valid and factual reasons that come into play in this regard.

1. Overselling of the Land

This is a much-heard debate in local circles as well. By overselling means, the land being sold is more than the land actually owned.

It is a clear fact that a society with a land of 5000 Kanal will divide the plots according to this size, but the ground reality is different as it is a practice to sell land more than actual ownership.

At the initial stage, there are now clues of plot number and location owing to the file system, by this, they generate profits but lose their credibility to apply for NOC.

The societies with this practice when applying for the NOC have already been kept on the radar and their applications are rejected on grounds of overselling.

The in-charge authorities whether CDA, RDA, LDA, or MDA check the total land owned and compares it with data of sold-out plots and with their own research regarding the land being sold in the market.

The quota of Commercial, Residential, or high risers, if also shows irregularity, will also be problematic for obtaining the NOC

Thus, overselling is the first point of rejection for a NOC request.

2. Absence of Master plan

The master plan is the detailed sketch of each and every activity including the sizes, dimensions, and positioning of every landmark.

When an application for NOC is moved without a working Masterplan, it will be straightly rejected because doubts, ambiguity, and uncertain plans are not adhered to while issuing NOCs.

Furthermore, it is pertinent to mention every detail like the location of residential plots, size of parks, sewerage track, and link road dimensions.

Other statistical information is also required by relevant authorities since they are not allowed to distribute NOCs without a Masterplan which in fact is a complete paper plan of that particular society.

It is also to be noted that Masterplan must be equalizing the total land owned and should not be exceedingly more than what the owner actually owns.

3. Ownership of Land

The applicant applying for the NOC while submitting the documents must verify whether the land record shows land in his/her name or not.

For instance, ProProperty, if launches a housing project and applies for a NOC for 10,000 Kanal then it is mandatory to have that amount of land registered in name of ProProperty.

On various occasions, this is a major hurdle that people face since the land is not directly in their own name and their NOC applications face rejection in this regard.

The land and revenue record, patwari, and tehsildar are accessible to CDA, RDA, LDA, etc. and when they encounter this glitch it becomes easy for them to brand that particular application as rejected.

4. Empty Land Pockets

This is currently the most challenging situation society owners face as they wish to apply for NOC. Empty land pockets mean that society holds land more than thousands of Kanal but in that whole land a very small piece is owned by an individual who is not willing to sell it to society.

Even if the master plan fulfills the entire criteria and still there is a dispute and the boundary is not clearly defined then it will not adhere to NOC issuance.

This challenge fact has also been faced by big brands like Bahria Town, DHA, etc. shows even a small empty land pocket can bring sustainable troubles for you.

5. Non-registration

There are various key departments that drive real estate matters in the country. When the owners or their firms are not registered, and their status is not regularly updated they face rejection while applying for NOC.

Registration with SECP, having a valid NTN number, a good profile with FBR, strong corporate setup are certain matters of equal importance and play a great role in influencing the NOC application.

6. Selling beyond the NOC Area

The societies in Islamabad are usually allocated NOC on some specific area that perfectly fulfills every standard by all means and holds NOC for the remaining area that is not meeting the criteria.

The moment society sells land beyond NOC approved area its previously issued NOC will also be ceased and stand canceled which in many cases we have seen in reputable housing societies.

The owners therefore must be mindful of this and refrain from trading the area upon which NOC is not issued.

7. The credibility and reputation

Since this is the most important factor that steers NOC issuing authorities, it also plays a vital role in local real estate.

NOC applications of Bahria Group of Companies would definitely be treated differently than any other society with lesser credibility and unknown reputation in the market.

This factor is also coupled with the impact of political clout that societies have which determines their success in grabbing the NOC.

Pro property has sneaked into the details to answer all the ‘WHY’ that people often ask when their invested societies fail to hook the NOC.

At the same time, it is also a guide for others in a bid to acquire NOC to realign their strategies according to the aforementioned precautions which would clear their way towards NOC approval.