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Want to invest in a beach front house? Here's a check-list to keep in mind

Here's a look at the CRZ norms and a check-list for homebuyers wanting to purchase a beachfront house or an apartment should keep in mind before investing their money

The Supreme Court has expressed ‘shock’ over construction of unauthorised residential structures in Kochi’s Maradu area considering the loss of lives during the recent floods, and said ‘illegal construction in coastal areas of Kerala is a colossal loss to the environment’.

“We are really shocked. What action has the state government taken against illegal constructions? If some disaster were to occur along the coastal zones, families residing in these buildings will be the first to get affected,” the Supreme Court bench had said.

As per the May 8 court order, five residential complexes in Kochi’s picturesque Maradu area, housing around 400 residents, had to be brought down after found their construction had violated the stringent Coastal Regulatory Zone (CRZ) norms.

The demolition order was passed in May, following submission of a report by a three-member committee appointed by the court, which determined that the construction happened when the area was a designated CRZ III zone where such constructions are not permitted. The court noted that the local panchayat had granted building permits without the mandatory permission by the Coastal Zone Management Authority (CZMA).

Here's a look at the CRZ norms and a check-list for homebuyers wanting to purchase a beachfront house or an apartment should keep in mind before investing their money so that their property does not meet the same fate.

What are Coastal Regulatory Zone (CRZ) norms?

For the uninitiated, as per the CRZ notification in 1991, a regulation zone has been defined as an area up to 500 meters from the high-tide line. Several kinds of restrictions apply, depending on criteria such as the population of the area, ecological sensitivity, distance from the shore, and whether the area has been designated as a natural park or wildlife zone.

Under the Environment Protection Act of 1986, the Ministry of Environment & Forests (MoEF) passed a notification for regulation of activities in the coastal area. As per this notification, a coastal land up to 500m from the High Tide Line (the maximum point of the land where the water's surface touches) is called the CRZ.

Coastal stretches of seas, bays, creeks, rivers and backwaters have been declared as a CRZ and have been classified into four different categories -- CRZ I, CRZ II, CRZ III and CRZ IV. This means that land has been segregated depending on its ecological sensitivity.

The Environment Ministry came up with fresh CRZ rules in December 2018, which removed certain restrictions on construction, streamlined the clearance process, and aimed to encourage tourism in coastal areas.

In January, the government notified new CRZ Rules with the stated objectives of promoting sustainable development and conserving coastal environments.

CRZ-II refers to developed land up to or close to the shoreline, within the existing municipal limits or in other legally designated urban areas, where the ratio of built-up plots to that of total plots being more than 50 percent and have been provided with drainage, approach roads, water supply, et al.

CRZ-III are land areas that are relatively undisturbed (viz rural areas, etc) and those which do not fall under CRZ-II.
A checklist for homebuyers

Check if the property falls under the CRZ zone and which zone category:

Before purchasing a property along the coast, the buyer should check whether the area falls under CRZ rules.

Moreover, a buyer should check if it is a non-development zone under the CRZ area, distance from the building and shoreline, and whether proper setback has been provided by the builder.

Moreover, the buyer should ascertain which zone -- CRZ I, CRZ II, CRZ III or CRZ IV -- within CRZ does the property fall under because different zones have different regulations. For instance, projects located in CRZ I and CRZ IV need clearance from the MoEF while others don’t.

Local bodies before considering the application for granting local permits would have to forward the same to the Coastal Zone Management Authority (CZMA) in case the project falls under the CRZ. Only after latter’s approval can a permit be granted.

How to identify CRZ areas?
For this, the homebuyer will have to refer to the CRZ map. In Kerala, it is published by the Kerala Coastal Zone Management Authority (KCZMA). This will help prospective buyers ascertain which category the land parcel would fall under, Kerala-based lawyer Ashkar Khader said.

Check if the land belong to the government

Buyers have to check whether the area where the project has been proposed falls on Poramboke land or land that belongs to the government. This information can accessed by checking records in the village office.

Whether the land belongs to the government or not can be ascertained by a survey. If the said land parcel belongs to the government no buyer can buy it. For this, a buyer should check revenue records.

“When we buy a flat, we do not look beyond the title deed as we are buying only a small portion. If it’s a big project, we tend to go ahead with the assumption that everything is in order. It is important to verify all the documents, check if it is a titled land and if the building has been constructed within the norms of the area plan,” Khader said. Also, buyers need to see if construction has been carried out in consonance with permits issued by local authorities.

Check if the builder has a building permit

Ensure that developers have a building permit for the required area. Buyers can ask builders to show the total area and verify whether they have a building permit for the said area.

Check CRZ maps

These would be available online. This map is embossed with survey numbers. This can be accessed from the website of the state authority.

Check the construction quality of the house

Since coastal belts experience different weather conditions it is imperative that a buyer checks the construction quality of their beach homes. “The material used must withstand heavy moisture, rains, floods, etc. Since construction is in proximity to the shoreline it is always better to check with local authorities on any geological risks,” said Prashant Thakur, Director and Head – Research, ANAROCK Property Consultants.

Get the house insured

Getting the house insured will come in handy during unforeseen calamities. "Rules and regulations for sale and purchase of a seaside property are governed by CRZ norms, which vary from one city to another. Every buyer and investor must check these prescribed CRZ norms while buying a beachside property to ensure that there are no irregularities that may affect the re-sale value of these homes in the long run,” said Amit Goyal, CEO India, Sotheby’s International Realty.

A house along the beach or at a hill station?

Although property prices at hill stations are a fraction of those facing the sea, affluent Indians prefer to invest in sea-facing properties, according to a pan-India survey by Track2Realty, a real estate think-tank group. Around 68 percent Indians would prefer to invest in a sea-facing property, 24 percent at a hill station and the remaining eight percent are either not sure or have a number of other destinations in mind, the survey reveals.

The results show that-sea facing properties have a clear edge over hill stations, which are mostly seen only as holiday homes. Among Indians who prefer waterfront properties, as many as 78 percent maintain that coastal homes are more than just holiday homes, unlike those at most hill stations. A larger number of respondents, 82 percent, feel a sea-facing property in most coastal cities offers a good work-life balance, with opulence and luxury.

Among those looking for a retirement home, as many as 70 percent wished to have a property along the coast, followed by 28 percent for hill stations, and the remaining two percent were unsure.

What makes sea-facing properties the most sought after?

About 38 percent respondents said they were tempted by the luxury living that it offers, 34 percent liked the view of the sea and sun, and 28 percent felt that the overall Livability index (including air quality) was better.

How much premium would an average homebuyer be willing to pay for a sea-facing property?The Track2Realty survey found that Mumbai-based high networth individuals (HNIs) would not mind paying even a 200 percent premium, while those in Kochi a 100 percent premium. However, Gujarat’s coastal properties would not command more than a 40 percent premium. Finally, with respect to returns on investment, more than three-fourths (78 percent) maintain that a coastal property offers a better rental potential and returns, than a property at a hill station.
Vandana Ramnani
first published: Sep 26, 2019 09:25 am