NOC on resale: Crucial issues unresolved
The Maharashtra government’s decision to abolish the requirement of ‘no objection certificate’ (NOC) from a developer at the time of resale of a flat is a long overdue step that would reduce the time taken for resale transaction and also eliminate the harassment that buyers routinely undergo. It is also a major relief coming at a time when the cost of property is reaching stratospheric levels.
The practice is prevalent in other states too, and the Maharashtra example would hopefully be emulated in due course.
Need for NOC
The rationale behind the NOC is actually very simple. It gives the land-owner or society the opportunity to know the new buyer and also ensure that the seller has settled all existing dues before the sale. It is like a bona fide certificate for the seller and a surety about the seller that the land-owner gives the buyer. It can also be understood as a status report about the premises and the legal position of ownership to the government, and the banks for loan processing etc.
The rider, however, is that no money can be charged for this procedure. That is not how it has worked.
Navin Shah (name changed) had to sell his newly bought 1 BHK flat of 460 sq ft at Goregaon, Mumbai. To get the sale registered, he had to get the NOC from the developer, as the housing society was yet to be formed. The developer charged Rs 600 per sq ft, calling it ‘transfer charges’ to be paid in cash.
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