|
India - News
Editorial
Opinion
Overview
Infrastructure
Demographics
Entertainment
Site
Map
Search site
Subscribe
Karmayogi
|
|
Basic concepts of property re-development in Mumbai
By Gaurang Damani (September 2010)
Many buildings are so old and
un-repairable, that the only solution is to reconstruct them. If you wish to
make re-development profitable for everybody, knowledge of the rules is
important.
Landlord or Society can
re-develop the property themselves, but as it is complicated, most generally
appoint a developer. The occupants must take care of the following factors,
while signing the agreement (no interim document must be signed):
- Precise details on carpet area (because
developer may mention super built up area, including flower bed, niche
area etc., rather than carpet area.)
- Temporary accommodation details
(including who will pay for flat deposit)
-
Stringent penalty clauses for
delayed delivery
- Provision for corpus fund - this can
take care of maintenance and the increased property tax after re-development and
re-assessment. Corpus fund must be deposited when property is vacated, so
its interest can start immediately.
- Payment of higher tariff electricity
bill/ water charges during part OC
-
Amenities clearly specified, like
parking; Mahanagar gas connection; pest control during construction;
branded electrical, kitchen, furniture and plumbing fittings; window grills; type of paint/
tiles etc. to be used.
- Other amenities can be asked for, like
stand-by generator; solar water heater; separate water lines for flushing
and kitchen; Rain water harvesting etc.
- Forming resident's society within
specified period of 12 months or as agreed in the agreement terms
- Arbitration details, in case of a
dispute.
- Sharing of gains due to extra FSI, if
policy changes
- Construction quality. Hence constant
watch on quality of construction must be done. If there is any
discrepancy, MHADA must be notified immediately.
- Helpline number, once property is handed
over to the society.
- Checking of agreement by occupant's
advocate, because once signed, there is nothing in the occupant's hands.
Occupants must also obtain the
following documents from the developer:
-
Performance guarantee from the
developer, This may include the "Defect liability period" of 24 months,
which will start after OC
-
Water proofing guarantee for
atleast 10 years after OC.
-
Bank guarantee from the
developer, upto 20% of the price of the re-development project, including
corpus fund, rent amount etc.
-
Financial statements including
latest IT returns and PAN number
-
Bank solvency certificate from
developer
-
All relevant insurances like
project insurance/ 3rd party/ labour insurance etc.
-
Undertaking to submit regular
progress reports, which must match original work schedule till BCC
(Building completion certificate)
-
Bio-data of key personnel who
would be handling the project.
-
Copy of license from government
agencies
-
Work contract sales tax number
- ESIC and PF registration details
- Occupants have to give a 'Power of
Attorney' to the developer, for various co-ordination with the government
agencies. After BCC, this PoA must be cancelled.
The developer would directly
submit the proposal to the board with the following documents:
-
BMC's latest cess category
certificate
-
Repair cess and Property tax
bills
-
BMC certificate showing upto
date payment of cess.
-
Conveyance deed
-
Lease agreements
-
Latest property card
-
Index II
-
Society registration
certificate
-
Latest true extract from
cadestral survey sheet
-
List of occupants as duly
certified by the Executive Engineer of the local BMC ward office.
-
Latest DP remarks (CRZ/ NA
order etc.)
-
Irrevocable written consent by
individual occupants, undertaking to shift to temporary accommodation,
etc.
-
Plan of proposed building
-
Affidavit cum Undertaking and
Indemnity bond by developer, as per above rules
-
And other documents as
applicable to the scheme
Stages of development:
-
NOC issued by MHADA (work has
to start within 12 months from date of issue of NOC)
-
Rehab of old occupants has to
be completed within 30 months from issue of NOC
-
Part OC (Occupation
certificate) for housing old occupants
-
Full OC, only after all the old
occupants have been housed in reconstructed building
(Mumbai Building Repairs and Reconstruction
Board) MBRRB's has issued guidelines for Landlords, Developers and Tenants/
Occupants for re-development under DCR 33(7):
- Any property on which cess (tax) is
charged for its repairs and maintenance by MBRRB, is called a cess
property, and is eligible for re-development.
- Consent of atleast 70% occupants
required for re-development
- Proposed minimum carpet area to be given
to tenant is 300 sq ft and maximum is 753 sq ft. So for eg., if a tenant
has 500 sq ft, then he can get the same area that he currently has.
- Non-residential occupants would get same
area as before.
- New tenancy created after 13/6/1996, is
not considered for redevelopment benefits.
-
PITFALLS of re-development: The new
members may have to bear an increased maintenance cost and also increased
property taxes. Also, till the Occupation certificate (OC) is not procured, they end up paying higher BMC and water/ sewage charges.
Other relevant information:
- Categories of cess buildings are as:
{Category 'A' - construction prior to 1/9/1940; 'B' - between 1940-1951;
'C' - after 1/1/1951}
- For category 'A', applicable FSI is 2.5 or 50% incentive
over rehab FSI, whichever is greater. So developer is assured of atleast
50% FSI for free sale.
- 20% of incentive FSI can be used for
non-residential purposes.
- Under DCR 33(9), Cluster development is
possible for mix of structures with minimum plot area of 4,000 sq mt.
Applicable FSI is 4 (or) required FSI plus incentive FSI of 50-75%,
depending on size of the plot.
- If the developer cannot use the FSI on
the same plot, then he can use the balance as TDR (Transferable
Development Rights), in the suburbs
This document is to be used as a guideline
only, and is not a replacement for legal opinion.
Thanks and Regards,
Gaurang Damani
damanig@diehardindian.com
|
|
Back to:
Editorial home page |
