Analyzing the Process and Recent Developments of Acquiring an NOC for Housing Society Development in Punjab

In a recent development to boost the construction sector in Pakistan, the Punjab government has fixed timelines for approval of No Objection Certificates (NOCs) for building plan, completion certificate, land use conversion, and private housing schemes. This is a welcome move by the government since delays in regulatory hurdles significantly impact the profitability of housing schemes. By improving the efficiency of these processes, investment in the construction sector can be drastically increased.

According to the notification, individual residential, commercial and industrial construction projects will be approved in 30 working days, while development authorities and metropolitan corporations will approve private housing schemes in 60 and 75 working days respectively.

Presently, approval of housing societies takes at least a year, if not more. While there have been several initiatives in the past to improve this system, such as introducing one window operations and digitization of land records, a marked efficiency in the process is still very much lacking, much to the dismay and averseness of the investor.

In this research article, we briefly highlight the process of getting approval for developing a housing society, and identify the bottlenecks that can be addressed to shorten timelines to get NOCs. In the second part of this series, we will provide further implementable recommendations that can be utilized to meet the approval deadlines of 60-75 days, as per the notification.

Overview of the Process

• We will look at the process from Lahore’s perspective. The first task associated with getting the NOC, is to identify the area where the housing society will be made, and check if this is a Green or Brown land. Construction approval is only granted on Brown Land that is not in use for irrigation purposes. In case of Lahore, this land is specified in the master plan, which is updated every 5 to 6 years. If the proposed housing society falls in a Greenland, it is not approved. Similarly, designated industrial lands – such as Special Economic Zones, cannot be made into residential societies. 
• Thereafter, it is mandatory to obtain the Preliminary Planning Permission (PPP) from the relevant authority. The PPP is a formality to check the status of the land ownership from the revenue department, and the situation of the land within flood-prone areas from the irrigation department. Moreover, during PPP procedural work, the Water and Sanitation Agency is also supposed to give an initial No Objection Certificate (NOC).
• To obtain the PPP, the owner is required to show an ownership document of the acquired land. However, it is not necessary to prove the ownership of the entire land planned for the housing scheme. The developer is required to show ownership of 20 per cent of the total land and a bank guarantee showing enough balance to obtain the rest of the 80 per cent, at a later stage.

Recent Revisions Made to this Existing Procedure

• It is important to note that an amendment to these procedures, under the Lahore Development Authority Private Housing Schemes Rules 2014, has been made on June 12^th 2020. The 20/80 rule was not only causing issues related to initiation of sale/purchase and transaction of the plots in the schemes, but the process of scrutiny was causing unnecessary approval delays of up to 6 months. Now NOCs will be obtained from the revenue department on the ownership of the entire land, along with NOC’s from other departments.
• Another significant development made through this amendment is that the NOC from the environment department can be provided to the Lahore Development Authority within six months of the final approval under certain terms and conditions. This modification is also going to speed up the approval process considerably. 

A Lack of Synchronization in Digital and Non-Digital Land Records

Digitization of land records is another commendable initiative taken by the Punjab Government. However, these records sometimes do not match those maintained by patwaris. As a result, the approval process gets delayed since on ground approval is still required to proceed with the application of a housing society.

The administrative division of land follows the hierarchy of mauzas, khewat, khatooni and khasra. At the khasra level (which is the minimum land subdivision and normally comprises of 8 kanals), for the development of housing schemes, if a land has been acquired or is under ownership, a khasra list is made, and ownership documents, including shajra and ownership fard, mutation, sale deed certified copy etc. are taken to LDA, after which a request of planning permission is made.

The ownership problem arises when land value becomes locked if one person who jointly owns land disputes land ownership, and since the consent of all owners is required to sell land in a khewat, acquisition problems persist. This becomes a major issue when generations of inherited land is claimed by multiple parties, resulting in substantial delays that are impossible to address in 60-75 days. Moreover, public notice is given after 8 months of land scrutiny in newspapers. This process should also be simultaneously carried out. If there is a public objection it makes the whole scrutiny process redundant.

There should also be a process conducted within the relevant development authority to clearly demarcate land boundaries in a khasra to reduce land fights. At its present state, it is not an easy process to define on-ground land boundary lines.

In the second part of this series, we will look into recommendations and further steps that the government is planning to take to make the process even more efficient.