Valuation of Unauthorized Building

How is valuation of unauthorized buildings assessed?

Before getting straight into the method of valuation unauthorized buildings, first let us understand what is an unauthorized building.

A building constructed unlawfully, either without approval or deviated from the approval accorded by the Building Authorities is classified as unauthorized buildings. The various types of unauthorized buildings include:

  1. Buildings constructed without approval in one’s own land

All over India, buildings are constructed in their own Patta land with or without the knowledge of Building Rules that they have to get the approval in remote villages under Rural & Town Panchayat areas, this system of getting Building plan approval is not in force, even now. In several cases, within the Corporation and Municipal limits, the owners knows the Rules of the local bodies, but their site dimensions and areas may not fit into these rules. In such cases, they put up their buildings in their available land without bothering about the approval. In Metro cities, this total violation of the law is not possible without the connivance of the authorities. They also expect/anticipate that the political bosses of the Government will come to their rescue in case of orders for demolition.

  1. Buildings constructed without approval in Revenue/Government land

There are umpteen numbers of cases in various parts of the country that the owners have built the buildings in vacant Government land by encroaching them either with the knowledge of the authorities. They are under the impression that if they possess these lands and buildings for few years, the State Government will automatically grant them Patta right or right to own.

However, the Government grants such rights only for the lands away from the road sides keeping enough cushions for the road expansion. It allows Patta rights on waste lands as well. Patta holders can construct buildings duly approved in these lands.

  1. Buildings constructed with approval partially and without approval partially

These are the most difficult cases for the valuers to analyze. The owners will obtain the approval for certain plinth areas and it will be deviated multifold. The deviation over approved plinth area is very common in most of the cases. The requirement at the time of approval may be different from the requirement during construction. However, if the deviation is within the power of the Approving authorities, he revised approvals can be obtained. If the deviation is either not approved by revision plan or deviated areas is in excess of the power of the Authorities, the entire excess area becomes unauthorized. Here the valuer has to exercise the extreme caution to analyze carefully and inform the owner and the Banks about the implication of the unauthorized portions. There are few cases where the buildings are situated partly in the land given as collateral security and partly situated in the land adjoining the furnishing land, but owned by the same owner or relatives. There are restrictions over height of the buildings or number of floors in various zones/streets as per the Central/State Government Rules. Central Government formulates such Rules for Coastal Zone, SEZ, Air Traffic, Defence zones etc. Whereas the State Government prescribes ceiling as per the requirements. Height or number of floors are a big impediment in multi-storey buildings due to the non-availability of higher range fire fighting equipments/Ladders.

  1. Deviation over Approved Usage:

The State Government/Local Self Government formulates zoning system for the land usage such as Primary residential zones. Multi-use zone, Industrial zone, Agricultural zone, Commercial zone etc. The building plan approvals are given in these zones only for the prescribed buildings for the prescribed usages. However, after obtaining the approval, the owners build to their actual requirement & use it for different purposes, which may be cause problems to other local people. Such buildings also come under the scanner of the authorities and they are classified as unauthorized.