FAQ for L Zone Dwarka Smart City Delhi

Question: What is Land pooling policy?
  • One can find detailed information on DDA website but to put it simple land pooling is a system of developing infrastructure for residences and other public amenities in which public people can submit their lands above 2 hectares to DDA for development. DDA keeps some of the land and returns the rest of the land to the public/private parties for them to build residential apartments.
  • For land above 2 hectares and below 20 hectares, DDA will return 40% of land to holders and the rest becomes the property of DDA
  • For land above 20 hectares DDA will return 60% of the land to the holder and develop the rest to the holder.
  • The scheme is a result of India’s vision to create 100 self-sufficient smart cities
  • The scheme aims at providing affordable housing to people and cover the huge gap between demand and supply
Question: Has the bill been passed?
Yes, the bill has been passed but it is not operative yet. Certain guidelines have to emerge and this might take time before it becomes operative. Only when it becomes operative will DDA ask for land submissions, till then no one can say that they have submitted their land, or claim that this is the plot where they will build their project etc.
Question: Will I get the land back at the same place I own presently?
  • A large number of players have acquired the land and will be submitting their Land to DDA. DDA will pool their contributions and consolidate them into large chunks.
  • From these large chunks it will keep a share for itself towards development costs and developing amenities.
  • Your area might be the one that DDA decides to keep for itself, in which case you will get some other area (40% or 60% of area submitted as explained before).
  • So the possibility of you getting 40% or 60% of land in the area you have submitted is unlikely.
  • However, DDA will allot a land within 5 kms radius of your land holding, according to the scheme. So factually when you submit the land you will get a portion of it within 5 kms of that holding, in any direction.
Question: Should I buy property under Delhi’s Land Pooling policy?
As per Mr.Balvinder Kumar, vice chairman, Delhi Development Authority (DDA), “The land pooling policy has already been notified on 05.09.2013 and regulations for executing the policy has been finalized for consideration and approval by the government of India. Simultaneously, government of NCT, Delhi has already approved one-stage stamp duty exemption. The process for declaration of development area and declaration of 95 villages falling in these zones as ‘urban’ is under process.” But what does it mean? Land Pooling is a concept that where small chunks of land are owned by group of owners who assemble for the development of infrastructure as per the provisions of the Delhi Development Act 1957.
After the development of the land, the Land Pooling agency redistributed the land after deducting some portion as compensation towards infrastructure costs. This is done to develop and bring out the potential of housing and infrastructure to reduce the load on the existing congested and saturated areas, like core parts of Delhi.
Questions: What is in for the buyers?
While land owners offering between 2 and 20 hectare of land for development will receive at least 40 per cent of their land back, and those who are giving away 20 hectare of his/her land would get 60 per cent of their pooled land back once the development is completed. The remaining land would become DDA’s property and will come under the Master Plan 2021.
Question: What is the current status? 
  • At present, DDA is acquiring the land under large-scale acquisition and disposal policy. DDA will soon make an advertisement in newspapers inviting applications for land pooling policy. The residential scheme 2014 announced by DDA was from the land acquired through this process. “At present, DDA has some residential land still available in Narela, Rohini and Dwarka. The schemes for these areas will be announced in the near future. As acquisition has become a cumbersome process, the future development through unified comprehensive planning will be through land pooling policy.
  • As per this policy, DDA together with the government will act as a facilitator with minimum intervention to facilitate and speed up integrated planned development.
Question: Is there a bracket set by DDA for capping the prices of properties available under Land Pooling Policy?
 It will be a free market and the prices will depend upon the facilities and  infrastructure provided by individual builders.”
Question: But why should one go for it? 
Through this policy DDA will be able to develop the urban extension area roughly of 20 to 24 thousand hectares. These areas will be self-contained with all facilities and infrastructure.
Question: So who can submit this land?
Anyone who owns a minimum of 2 hectares can submit this land. You could be an original owner, or a private buyer or a society who buys land on behalf of its members.
Question: Why should I buy now when nothing is certain? Even the land pool policy has not been made operational and there are no accurate assumptions as how long it will take.
It’s quite simple…. Future appreciation. “Land is cheap today” land is available to any investor in between Rs. 1200 to 2100 per square feet (As per location and Builder/Society Reputation) for flatted accommodation depending on location of the current land which is Near Dwarka.
 “However current rate in Dwarka is about Rs. 10,000 per square feet”.
Question: I do not Understand, if it is so profitable then why are these people selling their land now? Why don’t they wait?
There are big players in the market who already own very large chunks of land and will only sell when they finally get their land from DDA.
However smaller parties don’t have so big investments with them and would need members to pay out to the farmers. So they are forced to pool their buying.
Others, who had already bought the land much early at throwaway prices are now selling this land and making a profit. They will also profit from construction when it starts, from commercial shops etc.
Question: Looks interesting, should I buy land now?
By all means if you have money to buy at least 2 hectares of land all by yourself
Question: What if I don’t have money but would like to buy?
In that case you can join one of the societies or join builders who have already purchased land from farmers and are now selling their projects to interested people.
Question: Are all builders/society trustworthy?
  • Exactly Not!!!! Greed is a dangerous thing and you have to use caution. Many people who do not even have land have formed bodies and are taking money from unsuspecting buyers. Since they do not have any land, they are likely to disappear when the time of land submission comes and leave the investors without anything
  • Then there are others who are plastering boards on lands they do not own and claim it is theirs. They are paying as much as 2 lacs per months to fool people. They are then selling projects on those sites to people and collecting heavy advances. They will no doubt collect money as advance and vanish
  • Some others are confident that they will be able to buy land and collect a few people in the hope of buying land. If they cannot get adequate numbers in time, land prices will escalate and they will be left with a situation where they will be unable to buy land.
  • There are others who might later ask you to pay more prices or exit the model once the land pooling policy becomes operational and the prices begin to rise. Since all you hold will be a piece of paper that is not even legal, it would be you might vs. a powerful landowner or builder and you could fight a long drawn battle in court and face threats from these unscrupulous people in the meantime. In general, a common man cannot win with these elements. They will either be forced to exit at dirt prices or be blackmailed to pay a lot more
  • The other thing to watch for is the quality of flat you might get. The builder can cut quality and give you a badly constructed house to make a lot of money from construction. He may also jack the construction prices unreasonably and you cannot do anything about it. He can give you a carpet area that is much smaller claiming that he lost a lot of land in building infrastructure.
This is very scary..!!!
Of course with the wrong set of people it is very scary. Fortunately not everyone is out there to loot you of your hard earned money. There are some people of good reputation, though their numbers are less. But with the right people it can be a great and happy experience.
Question: What can I do to safeguard my investment?
  • Ensure that the person/body/welfare who is selling your land indeed owns a land by looking at the land registry documents, original and verify personally that the name to which the land has been transferred is the same as the person/body/welfare association. Do not invest at all if they give you excuses about not having papers when you demand
  • Make sure that person enjoys a very good social reputation, is not a criminal. If it is a builder find his reputation. If he has no projects to show, keep away, in all likely he is a fly by night operator. Do a background check on Google by typing the name of people concerned and following it by cheating/fraud/complaint/court case and more keywords that can show a previous history of fraud or court cases.
  • See the registry document of the society or body in case you are dealing with them
  • Make all payments by check or drafts. This will need white money and in case you
  • wish to deal with black money you run a lot of risk
  • Reject any builder who is showing you a ‘site’ as the site where they will build a project. He is lying and if he is lying to you at such an early stage, then he will do much more by the time you get back your project, if at all. No one can predict where their project will come up.
  • Get as many legal documents in your favour as you can as proof of your payment history – receipts, share certificate etc.
Question: What if the land pooling proposal of this body is rejected by DDA for any reason?
In case the proposal is rejected, the body might try to sell this land to another project owner. If there are no buyers, then it will be sold to a farmer and the money thus obtained will be divided among the shareholders after deducting all expenses incurred by the body.
Question: In such a case, how much money will be returned to me? More or less than I invested?
The likelihood of the money you get in case of a rejection scenario is much less than your investment. The higher prices being quoted today are not for the farm land but prospective prices keeping in view the high land rates that they will command in case the proposals are accepted. If the land is returned back to the farmer it will be at a much less cost than the current price. Also the body would have incurred a lot of expenses to promote their project and pay its office bearers the salaries for the period they worked and the rent of the premises. These too will be deducted and only the remainder is what you will get back. So you stand to lose a lot on your investment.
This is quite risky..!!!
It is a principle of economy that returns are directly proportional to risks. If you want total safety, then you should go for an FD or Government bonds. But the appreciation on capital in this case will be somewhere around 8%. If you invest in mutual funds you can make 15% but even here you can make a huge loss if the market collapses. If your project under land pooling meets approval then your investment of 1500 per square feet will fetch you a projected 9000 per square feet in a 9 year time horizon. It is for you to do the maths. Invest only if you can take the risk.
Hey, I’ve heard that DDA has warned the public not to invest in L Zone.!!!
True. It is a cautionary warning or advice to all those people who are carried away by coloured brochures and tall claims, when no one even owns a land. But the farmers who own the land in L Zones are already a part of the DDA Land pooling scheme and will benefit in future. By buying land for yourself through a share, you too become eligible. But you should be a genuine holder of land and not get trapped by Ponzi semesters who open and shut their shops just to dupe people.
Balvinder Kumar, Ex-vice chairman, Delhi Development Authority (DDA) said in an interview in Economic Times: “Do a thorough check before investing in such schemes”. Kumar said, “The land pooling policy is notified, however, the regulations are still under consideration. At present, builders/developers are promoting their schemes with details about land to be returned by DDA and are stating it to be a part of the DDA approved scheme. In this regard, DDA has already issued public notices to be cautious of such misleading advertisements as no such scheme is approved nor land to be returned is finalized by DDA.”
“DDA has not given any license/approval to individual societies and the return of land will also be based on the applications and subsequent processes in DDA,” he informed.
So it is a cautionary notice not a blanket ‘don’t invest at all’ message from DDA.