January 16, 2008	Wednesday	Muharram 06, 1429

KARACHI, Jan 15: Recent amendments to the Karachi Building & Town Planning Regulations 2002 (KB&TPR-2002) have allowed allottees to sublet, transfer or sell their unit before the approval of the completion plan and occupancy by the Karachi Building Control Authority (KBCA).

However the changes, made by city nazim Syed Mustafa Kamal, require an allottee claiming the above benefit to obtain written permission from the builder, who may allow such transfers after receiving all dues outstanding up to that point and a transfer fee of 0.5 per cent of the unit’s total price.

Once an occupancy certificate has been obtained from the KBCA and possession has been handed over to the allottee, however, the sale/purchase of a unit will be achieved through a registered sale deed. After this, the buyer will be required to obtain a no-objection certificate from the KBCA for the transfer/mutation of the unit from the relevant land controlling agencies, such as the city government’s revenue offices.

Another amendment to the KB&TPR exempts the KBCA from acting as an arbitrator in any dispute between a developer and an allottee where both parties have failed to execute a mandatory agreement within 30 days of booking the unit, and an allocation letter has not been issued by the developer.

The regulations now require both the developer and the allottee to execute an agreement in a specific form, in line with Section 12(4) of the Sindh Building Control Ordinance, within 30 days of booking the unit and before the allocation letter is issued by the developer.

According to a notification of the 2007 amendments to the KB&TPR-2002, which have been approved and signed by the city nazim, the allottee will make payments in instalments that strictly follow the schedule approved by the KBCA.

If an allottee defaults on more than one instalment, the develop is to issue a 30-day notice and send it via registered mail or a registered courier service to the last given address of the allottee. If the allottee fails to make the payment within the given period, the builder can issue a final notice extending the grace period by another 15 days, a copy of which must be endorsed by the KBCA. If the allottee fails to respond to the final notice and does not approach the KBCA within 15 days, the developer will be allowed to issue a cancellation notice to the allottee. A copy of this cancellation notice will have to be endorsed by the KBCA, and will also have to be published in the weekend editions of two leading newspapers (in both Urdu and English) in the classified advertisement section in bold format and under the heading, ‘cancellation of unit’. Even so, however, the developer will not be permitted to re-book the unit for 30 days after the publication of the public notice.

Cancellation and refunds

The amendments state that if the KBCA receives no response from the allottee during the stipulated period, it shall confirm the cancellation of the unit’s allotment and intimate the builder in this regard.

If the cancellation occurs before the execution of the agreement, the developer will be required to refund within 30 days the total amount paid by the allottee up to that date. If the agreement has already been executed, however, the developer may retain four per cent of the amount already paid by the allottee while the balance must be refunded within 30 days.

If, for any reason, the builder abandons the project, he will have to refund the total amount received from the purchaser with mark-ups calculated at the prevailing bank rates. Additionally, the builder must pay an additional compensation amounting to 10 per cent of the sums received from the allottee against the booked unit. The entire sum must be paid within 60 days of the publication of the relevant notice in leading Urdu- and English-language newspapers, in accordance with the specimen approved by the KBCA under the amendments to the KB&TPR-2002.