CHENNAI: The revised guideline value for properties came into effect across Tamil Nadu on Monday after the revision exercise was carried out as per due process, a release from the state’s registration department said on Monday.
According to the Builders Association of India and Confederation of Real Estate Developers’ Associations of India (CREDAI), the guideline value for properties has increased by more than 10% across Chennai. The Madras High Court had earlier quashed the Tamil Nadu government’s upward revision of guideline value for properties, saying that the state government had failed to follow the due process.
The registration department has also come out with a rule to register apartments based on their composite value. Hitherto, two separate registrations are done during the sale of apartments --- one based on the value of the undivided share of land (UDS) and second one based on the size of the flat.
Mohamed Ali, president of CREDAI, Chennai, said, “Previously, when the developer sells an apartment, the UDS and construction agreements will be registered separately. This has been followed for the last 30 to 35 years. Now the government wants a single sale deed. You can’t have a UDS agreement and a construction agreement separately anymore,” Ali said.
This would mean that if a person is buying a new apartment, he or she would be buying it on a composite sale, which is similar to buying an old apartment. However, Ali says there are few anomalies in the fixing of rates, especially since prices vary from street to street even within the same area, and they are holding talks with the government.
Sources said the government has promised to correct the discrepancies. “Since the new registrations must be done on composite value (land and building) the cost will go up,” Ali said.
Interestingly, most builders sell their flats for market value which is higher than the guideline value. “Even if the guideline value goes up, the flat cost won’t go up. Only the registration cost will rise,” Ali said.