Real estate in Pakistan has emerged as a promising business with large and stable investment returns. Multiple housing societies are being announced and launched everyday with numerous investments lining up to avail early discounts and high profit chances.
In such a scenario, risk has always remained high due to scams and false statements made by societies during launch and development stages. A common man often fails to identify illegal housing societies among the massive project outbursts on a daily basis. To avoid falling prey to any such fraud it is important to verify the NOC status of a housing society before making any investment decision.
This blog here explains what an NOC is and how it can be determined for any housing society.
What is AN NOC
A No Objection Certificate (NOC) is an official document given by a relevant government body to a housing society allowing them to carry out their development procedure after meeting all legal requirements.
An NOC is evidence that the housing society has gone through the standard procedure to acquire the land which is to be developed and no essential step has been bypassed. The layout plan, all the infrastructure to be developed and that has been developed according to government standards. This certificate therefore, is a proof of ownership and grants permission for further land sale. Once authorized by the government, the government then supplies basic utilities to the society.
Importance of NOC
An NOC is an important document in real estate business. This importance lies due to the following reasons:
● The legality of the project is verified, enhancing the credibility of the project.
● Any fraudulent activity in the project can be identified initially without falling for property scams.
● Thumb-up from government bodies is followed by provision of government based facilities.
● Property transfer becomes less hectic and high investment rates are often experienced with NOC approved projects.
● Bank involvement and bank loans are easier to get.
Who Issues NOC
NOCs are issued by the development authority of the respective province. For instance, Islamabad Capital Development Authority (CDA), for Rawalpindi Rawalpindi Development Authority (RDA), for Lahore Lahore Development Authority (LDA) exists.
How is NOC obtained
A housing society must conduct the following steps in order to acquire a No Objection Certificate from the relevant development authority.
➔ The Layout plan of the society, containing land breakdown for different usage, is provided.
➔ The Master Plan of the society, containing a strategic plan of growth and management for a long duration such as several years, is provided.
➔ The resources and logistics details are provided to determine if they follow government standards.
➔ Environmental safety measures such as Environmental Impact Assessment (EIA), Strategic Environmental Assessment (SEA) etc. have been conducted and reports are provided.
➔ Land is obtained through legal process.
➔ Tax duties and payments are cleared.
How to Check NOC of a Housing Society in Pakistan
The NOC status of any housing society can be determined through the following steps:
Online Verification
Majority of development authorities maintain an official website on which they maintain lists of NOC approved housing societies. Going to the website, looking for your housing society in the NOC approved list determines whether the project is approved or not. The status of the project as if approved, in process or rejected is displayed.
Development Authority Visit
If the concerned housing society cannot be found among the lists maintained then the office of the relevant development authority can be visited in person. An NOC of the concerned society can be asked for verification.
Contacting Housing Society
Another method of verifying NOC is to visit the housing society’s office and to demand an NOC. An authentic society will be able to produce an NOC on spot.
Consulting a Real Estate Agency
Taking help of a reputable real estate company can be another way to acquire details related to the NOC of a project. Safra Developers with their team of professionals provide assistance in determining NOC status of any housing society.
Red Alerts of illegal Housing Societies
Some tipoffs of illegal housing societies to look out for are:
➢ The housing society fails to provide an NOC to its customers
➢ The project is not listed among NOC approved societies.
➢ Huge gaps between market prices and prices offered in the housing society.
➢ Very low developmental progress despite claims of complete paperwork.
➢ The society is planned on disputed or agrarian land.
LOP vs NOC….They're not the same!!!
No Objection Certificate (NOC) and Layout Plan (LOP) are two distinct features in real estate but can be used interchangeably to give an illusion of legality. Such misinformation can ultimately lead to the trap of property scams. A layout plan like No objection certificate also needs approval from a development authority but this does not imply the housing society has met all legal requirements to carry out development.
An LOP is simply a plan which enlists total area and number of residential, commercial, recreational, green spaces etc. or in more simple terms a division of discussed land into sub-land uses. While an NOC is an approval on the basis of complete satisfaction of legal procedures such as land acquisition, environmental safety procedures, tax payments and standardized raw material usage.
This means if a society claims that they have been approved by a development authority as LOP is approved it does not imply that an NOC is also approved automatedly. LOP approval is an early step followed by NOC approval.
Therefore, No Objection Certificate (NOC) is a legal document issued by the relevant development authority giving the property approved a legal status and so the property is protected by the property laws of Pakistan. An NOC ensures a legally acquired property with government supplied utilities, easy bank process and fraud-free property transfer.
This document is a critical step in decision making for investments in housing societies and so can easily be verified through online portals provided by development authorities by going through NOC approved societies' list.
Other verification methods include visiting and asking for NOC from development authorities, societies’ offices or real estate companies. Inability to verify can risk investments and may result in heavy losses.