As a part of their protest, they have formed a 501-member protest committee and 33-member main steering Committee and even announced not to pay bank loans to press the government withdraw the decision that came into effect from Wednesday.
Department of Land Reforms and Management (DoLRM) on Wednesday had instructed all Land Tax Offices (LTOs) not to register ownership in the name of the housing companies, unless they produce Land Reforms Office´s (LRO´s) letter that the company´s landholding does not exceed the ceiling. The DoLRM said it took the decision to enforce existing law and introduce fair play in realty business. However, the decision has instantly brought transactions of registered developers to a grinding halt.
Reacting strongly to the move, Nepal Land and Housing Developers´ Association (NLHDA) on Thursday called an assembly of all developers in the country to protest the decision.
“The assembly as demanded the government to instantly review central bank´s new directives -- that raised lending interests of banks and capped the bank and financial institution´s loans exposure in realty sector -- and DoLRM´s decision to halt transactions of housing companies,” said Ichchha Bahadur Wagle, vice president of NLHDA.
Talking to Republica, he said the central bank´s directives had already discouraged realty business and also added interest burden on them. “On top of that, DoLRM has halted our transactions. How are we to repay the loans?” Wagle questioned.
Land and housing developers also decided to defy DoLRM directives, which ask them to submit details of their landholding at the LROs so that the office could verify their landholding claims and issue clearance for swift transactions. They have given a five-day deadline to DoLRM to simplify registration procedures and resume their transactions.
“Or else, we will bring operations in all LTOs across the country to a halt by coordinating with solicitors,” NLHDA said.
DoLRM, however, has tagged housing companies holding more than 25 ropanis (3.14 acre) in the Kathmandu Valley, 80 ropanis (10.05 acre) in the hills and 11 bighas (17.97 acre) in Tarai districts as operating illegally.
“Had they wanted to operate formally, they could have easily requested for exemption on ceiling,” said a DoLRM official, referring to Entrepreneurs´ Industrial Enterprise Act (IEA).
IEA categorizes realty business under service sector and allows them to own land beyond the ceiling on government permission.
“Sadly, none of the land and housing developers has sought such permission so far,” said the official.
DoLRM last month decided to monitor landholding by housing companies after its investigation showed some of them owning as much as 105 ropanis (13.19 acre) without due approval. DoLRM even approached the NLHDA to furnish property holding details of its members. But as developers´ cold shouldered its call, it decided to rake stringent measures.
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