No Mortgage Rule for Small Buildings

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The 10% mortgage rule for residential constructions on plots of size of 100 sq. meters and above was scrapped by the municipal administration and urban development (MAUD). Earlier, the mortgage rule was applicable only for the buildings whose size is more than 200 sq. meters. However, the rule was changed (six months back) and was implemented even for houses on plots with a size of and above 100 sq. meters. Now, the new rule applies for only residential constructions on an area above 300 sq. meters and commercial constructions more than 200 sq. meters.

The main aim for the implementation of the mortgage rule is to avoid unauthorized constructions in the city. Either 10 percent of the built up area or one floor of the construction has to be mortgaged to the municipal body. It is only released if there are no deviations from the sanctioned plan. The department has the right to take action on the builders if there are any deviations and the occupancy certificates are even denied. Also, the mortgaged portion cannot be leased by the municipal body. With the change of the mortgage rule, small building owners have a sort of relief.

Source: Times of India

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