Ordeal of having mortgaged plots

LAHORE
THOUSANDS of buyers of plots in private societies are running from pillar after the Lahore Development Authority (LDA) has decided not to entertain cases of releasing mortgaged plots of private housing societies until they (societies) are given a clean chit by the authority.
The process of getting a mortgage plot released from LDA is termed redemption. Highly placed sources in LDA revealed that the authority has halted the process causing serious inconvenience for hundreds of thousands of people who have invested their hard earned money for buying plots in various private housing societies. Sources said Director General LDA Ahad Khan Cheema had passed clear instructions to the authority’s One Window Cell to stop entertaining such cases.
As per Lahore Development Authority Private Housing Schemes Rules 2014, every private housing society is bound to mortgage/transfer its 20 percent land/plots to the LDA, which LDA keeps with itself and release them after completion of development work and other needed requirements from the developer.
As per Section 51 of Private Housing Schemes Rules 2014, ‘The Authority shall release the mortgaged plots in proportion to development works consisting of: (a) water supply sewerage and drainage; (b) roads work; (c) electricity and streetlights; (d) Sui gas (if available); and (e) horticulture and solid waste on obtaining field reports from the Agency which approved design and specifications about the satisfactory completion of work or full payment of charges to the agency or department concerning electricity and to Sui Northern Gas Pipeline Company, as follows: (i) on completion of 25 percent of the development works, up to 24 percent of the mortgaged plots shall be released; (ii) further mortgaged plots shall be released in proportion to every stage of 10 percent completion of works; (iii) four percent of mortgaged plots shall be attached with the management and maintenance of the housing scheme; and (iv) after completion of development works, on submission of a written request for the maintenance of housing scheme by the sponsor or handing over of the housing scheme to the association of the residents of the housing scheme, the remaining 4% plots shall be released.’
The CMP Wing of LDA is responsible for launching crackdown against approved private housing schemes, which had violated the LDA’s approved scheme plan and sold mortgaged plots or carved out plots in public utility sites or illegally extended their schemes without getting necessary approval from LDA. On the other hand, reality is that majority of private housing societies sell their mortgaged/transferred to LDA plots to the general public. When these innocent buyers contact LDA for transfer of plot in their name, LDA officials inform them that their plot(s) is mortgaged and can’t be transferred to them unless the housing society completes the development work and execute mortgage/transfer deed in favour of LDA. Buyers of these plots were also stopped from making any type of construction on their land.
A senior LDA official, seeking anonymity said that Section 53 of Private Housing Schemes Rules 2014 reads, ‘Default and action.-(1) The Authority besides any other action, shall impose the fine mentioned in rule 36 on the sponsor if he continues to develop the housing scheme without approval of layout plan or if he fails to develop the housing scheme within the stipulated period. (2) In addition to the above, the Authority may take over the development works of the scheme and execute the development works from the sale proceeds of mortgaged plots or encashment of bank guarantee. (3) If the cost of development is more than the proceeds as mentioned in sub-rule (2), the Authority may recover the extra amount from the sponsor as arrears of land revenue.’
While section 36 of the Act says, ‘Penalty for illegal development.-The Authority, besides any other action, shall impose the fine mentioned below on a person, if the person develops or continues to develop a housing scheme without approval of Authority or fails to develop a housing scheme within the stipulated period after approval of the Authority: (a) Rs5,000 per day till the default continues in respect of the schemes having an area up to 300 kanals; (b) Rs10,000 per day till the default continues in respect of the schemes having an area more than 300 kanals but up to 500 kanals; (c) Rs15,000 per day till the default continues in respect of the schemes having an area more than 500 kanals but up to 1,000 kanals; and (d) Rs20,000 per day till the default continues in respect of the schemes having an area more than 1,000 kanals.
Admitting LDA’s fault, he said the authority is not playing a vigilant role in this case and instead of taking strict action against the private housing societies for selling mortgaged/transferred to LDA plots, the LDA has stopped entertaining complaints of the general public in this regard.
The scribe met one of such complainant (name hidden on his request) at the LDA office Johar Town. He said he purchased a plot in Valencia Housing Society and for the past three years he had been a football between the society and the LDA. He said LDA told him to go to the society while the society told him to go to the LDA. He also claimed that he knew many people who used their ‘connections’ and got their plots released by the LDA.
When contacted, LDA’s spokesman said that LDA had taken a number of steps for ensuring completion of development works in private schemes before redemption of plots mortgaged by them. He said the authority also adopted measures for executing transfer deed of public utility sites in favour of LDA for facilitating their sale through open auction for setting up schools and medical centres in these schemes. He said it was the responsibility of the buyers to check the status of plot(s) from LDA before buying.