NA Plot vs Agricultural Land in Pune – Legal & Investment Differences

1. Introduction

Are you looking to buy land in Pune? Before you sign any agreement, you should know whether it's agricultural land or a non-agricultural plot (NA plot).

You'll find that NA plots in Pune are more expensive than agricultural lands. Understanding the difference could save you from expensive legal processes in future.

Agricultural land in Maharashtra is meant for farming. You can't buy, sell, or construct on them. There are restrictions according to the Maharashtra Land Revenue Code. If you are not a farmer, you can't legally buy farmland unless the government approves.

In Pune, the NA plots have undergone a land-use conversion, officially, as per the state government policies. You can now use the land for construction purposes. Reputed builders like Shapoorji Pallonji have come up with plotted-development projects like Treetopia in the Pune Growth Corridor.

From an investment standpoint, the two categories of land differ significantly in legal and financial terms. Let's analyse.

2. At-a-Glance

A. Is there any difference between the government rules related to investment in non-agricultural vs agricultural land in Pune?

B. What are the differences in investment processes related to non-agricultural vs agricultural land in Pune?

C. Which upcoming Pune plotted project can you invest in for profitable future returns?

3. NA vs Agricultural Plot

The core difference is the legal permit for land use. Agricultural land is to be used strictly for farming and related activities. There are strict regulations against other uses, particularly constructions, unless you get permission.

NA plots have undergone an official conversion for other uses. This is handled by the Maharashtra Land Revenue Code and the collector's office. You have to get clearance from them for any non-farming activity, such as residential projects.

NA plots have diverse uses. For real estate development, there are many related factors. These are the types of constructions, loan facilities, ownership rights, and other matters.

4. Legal Comparison Between NA and Agricultural Plot

Buying and selling agricultural land involves the following:

• Ownership of agricultural land and its use are specified by the Maharashtra Land Revenue Code, 1966, and the Maharashtra Agricultural Lands (Ceiling on Holdings) Act.
• Buying of farmland is exclusively restricted to farmers or individuals who have their primary income from agriculture.
• Clearance is compulsory for agricultural land transfers.
• There should be no violation of land ceiling limits.
• There is a ceiling on how much agricultural land an individual can buy.
• Verification requirement of the 7/12 extract (Satbara Utara), which is an important land record document related to buying and agricultural practices.

The rules related to NA plots:

• Post the receipt of a non-agricultural order from the district collector, a plot is open for purchase by any Indian.
• The standard property registration procedures under the Registration Act, 1908, are to be followed.
• There's no ceiling on buying land area or its use.
• Due to the legal transparency, NA plots are highly sought after by developers and investors.

5. Investment Comparison

Investing in agricultural land is attractive initially, since the price per square foot is often lower than that of converted plots, but there are complications:

• Banks and financial institutions in India usually do not offer home loans or land purchase loans against agricultural land.
• The buyer needs to arrange the full purchase amount through personal funds.
• The pool of potential investors is limited, raising the financial risk.
• The requirements as per due diligence on agricultural land:
  1. Verification of the 7/12 extract
  2. Checking regarding the notice of government acquisition
  3. The land shouldn't come under a no-development zone
  4. The seller should have valid agricultural credentials
  5. A lapse in any of the specified norms can lead to severe legal consequences

Investment requirements in NA plots:

• After legal land conversion, buyers can apply for loans from banks and finance companies.
• Investors such as salaried professionals and NRIs are eligible.
• The due diligence process is simple:
  1. Verification of the NA order, scrutiny of the approved layout plan, and confirmation of MahaRERA registration for plotted developments
  2. Reviewing the title for discrepancies
  3. NA plots reselling is hassle-free, as there's no ownership issue

Appreciation is high for NA plots in Pune Growth Corridors and Hinjewadi, as there's legal clarity and the locations are highly sought-after during market slowdowns, too.

6. Government Rules and Conversion

The conversion of agricultural land to NA plots follows Section 44 of the Maharashtra Land Revenue Code, 1966.

• An individual has to get permission from the District Collector to use agricultural land for NA usage or to start construction.
• Not adhering to the rules can result in demolition notices, penalties, and other issues.
• For the application process, you have to submit a set of documents that will consist of the 7/12 extract, a property card, site plans, proofs of ownership, and a specification of the land use.
• Applications for lands under the Pune Metropolitan Region Development Authority (PMRDA) or Pune Municipal Corporation (PMC) go to the respective planning authorities for a No Objection Certificate and then the NA order.

Online portals of the Mahabhumi and e-Mutation systems are available. Post issuance of the NA order, you can develop, sell, or mortgage the NA plot, like the Treetopia by Shapoorji Pallonji.

Buyers have to carefully scrutinise the NA order to check whether it's genuine, current, and specifies the intended use.

7. Risks and Legal Mistakes

• Improper verification of the authenticity of an NA order.
• Purchasing a plot with a lapsed NA order.
• Unsanctioned plots.
• Title disputes.
• Plots having unresolved succession, pending court litigation, or undisclosed mortgages.
• Buying plots in no-development zones, green zones or heritage sites.
• Lands beside rivers, lakes, or hills can carry additional environmental restrictions under the Environment Protection Act or orders from the National Green Tribunal.
• RERA compliance restricts developers from selling NA plots as part of a plotted development scheme involving more than a certain number of plots or exceeding a prescribed area threshold.
• Buying plots from an unregistered project puts the buyer's investment at risk.
• Many buyers underestimate the importance of verifying the exact boundaries of the plot through an independent survey, especially in rapidly developing peripheral areas of Pune.

8. Should You Invest in NA-Plotted Projects?

Pune's real estate market has been growing over the past few years, due to expanding IT and manufacturing corridors, improving infrastructure, and a steadily growing population of working professionals and migrants seeking affordable alternatives to Mumbai.

The city's peripheral zones, including Hinjewadi and the Pune-Nashik highway corridor, are highly sought-after by both individual investors and large developers.

The ongoing expansion of the Pune Metro network, the development of the Pune Ring Road, and the increasing connectivity between Pune and its satellite towns are all actively pushing land values upward in peripheral areas.

For an investor with a medium to long-term horizon of five to ten years, strategically located NA plots in Pune's growth corridors represent one of the most inflation-resistant assets available.

Land does not depreciate structurally, has low maintenance costs, and gives the owner the flexibility to develop, lease, or resell based on market conditions.

Buyers currently have access to better-documented projects, clearer title chains, and more reliable legal recourse, making the investment environment safer than before.

It is important to verify the NA order, the layout sanction, the title documents, etc., and ensure the project is RERA registered. If these factors are fine, NA plots are a strong investment opportunity.

9. Decision Framework Related To NA Plot and Agri Land

Considering NA plots and agricultural land in Pune, it is about which one is the best fit for you and your intended use.

For farming purposes, agricultural land is both a financial asset and a source of livelihood. You do not need an NA order, a construction permit, or RERA compliance. The various government schemes include farm subsidies, crop insurance, irrigation support, etc. However, using agricultural land as an investment asset in Pune will almost always work against the investor in the long run.

As an investor, you might be interested in capital growth, returns, and eventually liquidating the asset at a profit. For these purposes, NA plots in Pune are structurally better suited. You have the legal freedom to develop, mortgage, or resell without restriction, and access institutional financing.

A clarity of title would attract a large number of buyers. The direct relation between infrastructure development and land price appreciation makes NA plots a safe and versatile instrument of investment.

10. Factors To Watch In A Plotted Project

Investing in a plotted project in Pune's growth corridors can be one of the smartest financial moves that you may make. Important factors include legal verification of the NA order and layout sanction. Get the documents independently verified by a qualified property lawyer. Check RERA registration, besides the location and connectivity, as they are drivers of long-term value appreciation in any plotted project.

The best growth corridor investments in Pune are those that are located within a reasonable distance of existing or upcoming infrastructure, such as metro stations, national or state highways, IT parks, educational and healthcare clusters, etc. The convergence of these amenities transforms a location into a thriving residential destination over time.

Areas along the Pune Ring Road, the Pune-Nashik highway, and the Treetopia in the Pune Growth Corridor are some of the strongest infrastructure-backed plotted projects.

The developer's track record is another factor. A project backed by a renowned developer like Shapoorji Pallonji, with a history of over 160 years of construction projects, is worth investing in over a cheaper project from a lesser-known developer.

11. FAQs

How would you differentiate between NA plots and farmland?
You have to check whether the land has received its non-agricultural order from the district collector's office and is open for purchase by any Indian citizen.

Why is Pune in high demand for plotted NA properties?
Pune NA plots are highly sought-after due to the growth corridors located within a reasonable distance of existing or upcoming infrastructure, such as metro stations, national or state highways, IT parks, educational and healthcare clusters, etc.

What are the legal requirements related to the NA-plotted projects?
The land has to obtain its non-agricultural order from the district collector's office, standard property registration procedures under the Registration Act, 1908, requiring stamp duty payment, execution of a sale deed, and registration at the sub-registrar's office.

What are the government rules on NA-plotted projects?
Any person who wishes to use agricultural land for a non-agricultural purpose must first apply to the District Collector's office for an NA order before commencing any development or construction.

How to decide between NA plots and agricultural land?
Considering NA plots and agricultural land in Pune, you have to decide between the two based on your intended use of the land.

What is a renowned non-agricultural plotted project in Pune?
Treetopia by Shapoorji Pallonji in the Pune Growth Corridor is a renowned plotted-development project.

What are the factors that you should look for while buying a plotted project?
Important factors that you need to check are the legal verification of the NA order and the layout sanction, document verification, RERA registration and the location and connectivity of the plotted project.