CHANDIGARH, Dec 13 — The Punjab government has tightened norms related to external development charges (EDC), requiring developers to make upfront payments and furnish financial security as part of a broader overhaul of real estate regulations.
As per amendments to Section 5 of the Punjab Apartment and Property Regulation Act, 1995, developers will now have to deposit 25% of the total EDC within 30 days of the issuance of the letter of intent, the Housing and Urban Development Department said in a notification dated Dec. 5.
Earlier, the government allowed payment of EDC before the grant of licence, offering developers greater flexibility in scheduling payments.
For the remaining 75% of the EDC, promoters will be required to furnish a bank guarantee along with applicable interest or execute a hypothecation or mortgage deed. The security must be for property of equivalent value, calculated at 90% of the collector rate, and must be drawn from within the same project, the notification said.
“In case of default in payment of external development charges or failure to complete internal development works, no fresh approval shall be granted to the promoter until all dues are cleared,” the department said.
Officials said the revised framework is aimed at securing government revenue and preventing delays in infrastructure development linked to housing projects. “The changes are meant to ensure accountability and timely completion of internal and external development works,” an official said.
The amendments are expected to have a significant impact on developers with pending dues, as future project approvals will now be linked to compliance with existing financial obligations.
