Bank loans, easy registration lured buyers to unauthorised flats in Greater Noida

GIC Housing Finance, India Infoline Housing Finance Limited (IIFL) and many other non-banking financial companies gave loans to home buyers, who bought flats in the residential buildings that were constructed without getting approvals from the Greater Noida authority.

With easy loans offered by financiers and registration of flats executed by the department of stamps and registration, unsuspecting buyers were lured towards buying a flat in thousands of ready-to-move-in flats in Shahberi village and surrounding areas.

A relative breaks down at the site in Greater Noida where two buildings collapsed on July 17, leading to the death of 8 persons. (Sunil Ghosh/ HT Photo)

Shiv Kumar Trivedi, 24, an operations manager with an agency in Noida shifted into his fourth floor flat with three other family members in Qasim Villa only after executing the registry at the stamps and registration office.

“After getting home loan and executing registry, Shiv thought that the deal was legal. He was happy as he had bought a house,” said Narendra Trivedi, uncle of Shiv Kumar.

Homebuyers, who have invested in flats in many buildings in Shahberi, gathered as they heard that the two residential buildings — one complete and the other under construction — have collapsed.

GIC Housing Finance, India Infoline Housing Finance Limited (IIFL) and many other non-banking financial companies gave loans to home buyers, who bought flats in the residential buildings that were constructed without getting approvals from the Greater Noida authority.

Buyers are puzzled about the manner in which their application for a house loan was approved if the buildings were constructed without proper approvals.

“We did not have any doubt over the legality of the flat after we got the home loan approved quickly as financiers exercise due diligence in taking care of their interest,” said Sandesh Kumar, whose family bought a flat in the unauthorised building that collapsed.

A housing project becomes legitimate if the builder has purchased the land for the housing purposes from the Greater Noida authority and various building bylaws are followed.

Mahendra Chaudhary, a social activist from Shahberi, said that a one-BHK flat is generally sold here for ₹14-17 lakh while a 2-BHK flat is easily available for ₹20-23 lakh.

“Brokers cash in on the situation and arrange for loans for homebuyers. Following a court case in 2011, the area got de-notified and the acquired land was returned to farmers. Later, the developers chipped in and purchased land for construction of multi-storeyed buildings,” he said.

Homebuyers thought that the financing agencies must have done due diligence while clearing the project for housing loans.

A manager of a bank in Gautam Budh Nagar, Vijay Shrivastava said, “All banks, private or government, or even financing agencies follow set procedure before sanctioning a home loan. The legal team scrutinises the land title, approved map and occupancy certificate issued by the local authority such as Greater Noida authority. If any approval is missing, home loan cannot be approved. I do not know how these buyers secured home loan for this building, which was not even sanctioned by the local authority.”

The Gautam Budh Nagar stamps and registration department said that they execute the registry of a property without going into the legalities.

“We do not have power to conduct a probe and check legality of a particular property, be it a flat or a plot. We register a property if they are paying proper stamp and have two witnesses. The buyers should exercise due diligence before they make an investment or get the registry executed,” said GP Singh, deputy inspector general, stamps and registration department in Gautam Budh Nagar.