Rules for redevelopment of tenanted buildings

July 5, 2018


Q. I am residing at a Mhada Society at Andheri (W). We gave our society for redevelopment to builder around four years ago, but still there is no activity, so what we can do next?


A. You have to issue a show cause notice to the developer for the Re-development Agreement to be cancelled. If you do not get a satisfactory reply, the general body may decide to terminate the development agreement and appoint a new developer. It is possible that the earlier developer may file a case against the society and the new developer praying for a stay. In a normal course, the court does not give any stay. Since the matter is of Mhada Colony at Andheri-West, the developer had given a very good offer of extra area and corpus, considering that they would get FSI of 3.5 and need to pay only premium to MHADA for using the FSI.


Due to latest changes in the MHADA policy since September 2010 demanding the built up area to be given to MHADA has changed the entire economic calculation of the builder. They must be waiting for changes in the MHADA policy.


Now, the Mhada policy is also favourable for the last one year. As per the latest notification related to 33(5), if the area of the plot is less than 4000 sq. meters, Mhada does not want any built up area and only by paying premium, the developer will be able to carry out the development Therefore, issuing a show cause notice and changing the developer will be appropriate, if the developer does not have capacity to carry out the development.


Q. How to redevelop tenanted building in suburban Mumbai and south Mumbai?


A. In the case of tenanted buildings in suburbs, the redevelopment initiatives has to be taken by the land owner. It is normally the land owner who engages the developer and the developer agrees to give the tenants the ownership rights in the new building of the same area or with little additional area. In the case of tenanted building, the entire rights of redevelopment is with the land owner. If the same is in Mumbai City (South Mumbai) and cess building, the consent of 70% tenants is required to start the redevelopment including the NOC from the land owner. In the case of cess building, every tenants gets the area as prescribed in Development Control Rules 33(7). According to this tenants having less than 300 sq. feet will get 300 Sq Feet carpet area, Tenants having 300 to 753 Sq. Feet shall get the existing area and tenants having more than 753 sq. feet shall get maximum 753 Sq. Feet carpet area. Further all the tenants will get ownership flats in the new building including the fungible FSI of 35%.


Now, government has introduced a new development Control Rules numbered as 33(7A) which is applicable to Suburban District of Mumbai. According to this, now the tenants will be able to get all the benefits like cess building in south Mumbai. Now you will be able to put pressure on the land owner to develop the building otherwise, write to Mhada to take over the tenanted building for redevelopment.


Q. If a Contractor/Developer is doing a redevelopment project on a Corporation Land which will be taken as lease, how much liable is the Corporation in case of delays in RERA?


A. Since the land is given on lease basis by the corporation to the developer for development, the MCGM(Municipal Corporation of Greater Mumbai) does not become a promoter liable for RERA. If MCGM is taking certain area built up for their purpose from the redeveloped area, then the MCGM will be considered as another promoter and become liable to the purchaser of the units in such project.


(Ramesh S. Prabhu is Chairman,  Maharashtra Societies Welfare Association)

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He is a Chartered Account Practicing for the last 2 decades. He was a Member of Deemed Conveyance Committee of Govt. Of Maharashtra Represented before the joint Committee for Making Changes in the Maharashtra Housing Act 2012


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