People in general strongly beleive that land sold by Government bodies is always safe. But this is not the case. For instance, Noida Extension was one of the few locations where people of middle income budget could buy a two bed-room flat in an under-construction project for around 30 lakh. The ruling by the Honourable supreme court of india last year in the matter of Devender kumar v/s State of UP, ruled against the acquisition of land by the Greater Noida Industrial Development Authority(GNIDA).
The Farmers calimed that the land was acquired from them for industrial purpose by paying stipulated compensation and later status of the same had been changed to commercial and sold to land developers to the highest prices. The farmers also claimed that higher compensation would have been paid to them if the land was accquired directly from farmers for commercial purposes. So the Honourable court quashed the acquisition of 156 hectares of land by GNIDA of shahbari village. Simlar ruling had been given by the Honourable Allahabad High court for one patwari village too.
As a result Construction of apartments in Noida Extension was stopped and the investors got into the real trouble. The loans were sanctioned and the EMI's were being paid for the flats that might never be constructed, apart from paying rent as usual. So instead of beleiveing in Myth " LAND SOLD BY GOVERNMENT BODIES IS SAFE" its good to stick to land whose ownership is not divided when one want to buy a piece of land that are being newly develpoed. Also consulting a good lawyer to ensure that all the paper work,clearences and use conversions are in order.
Most of the home buyers think that banks and housing finance corporations do proper due diligence before lending to buyers. But the realty is banks and HFCs play safe role by slipping in a clause in the loan contract that finally pass the responsibility of repaying the loan on the borrower, irrespective of whatever happens to the property. Its always safe to do a thorough due diligence by the investors themselves. Its safe to check if the developer has a clear title on the land & ncessary approvals. If there is recent conversion the history of the same needs to be checked too.
