A redevelopment agreement is a contract signed between the land owner and the organisation tasked with developing the land. It outlines the parties' duties and the rules and guidelines that will apply to the development of the property. The Maharashtra Real Estate Regulatory Authority (MahaRERA) has outlined the rules that will apply in the case of redevelopment. This article contains information about RERA rules for redevelopment and new FSI rules in Mumbai for redevelopment.
RERA Act in Maharashtra:
Every Indian state must have a Real Estate Regulatory Authority under the Real Estate (Regulation and Development) Act, 2016. It oversees the real estate sector and outlines the steps for dispute resolution. The Maharashtra Real Estate Regulatory Authority, or MahaRERA, was the first to adopt RERA. It serves the following purposes:
- Provides guidelines for selling land, houses, and other assets.
- Protects consumer interests in real estate transactions.
- Provides a quick dispute resolution process using a settlement mechanism.
- Hears and resolves buyer complaints.
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RERA Rules for Redevelopment:
For properties that are considering redevelopment, the following steps need to be followed:
- A letter of offer must be made to the community
- Agreements must be signed between the parties and the society
- Compatibility with the society must be ensured
- MCGM sanctions must be in society's favour
- TDR must be updated in the name of the society
- An IOD must be obtained
- Members' substitutions must be noted
Once these steps are completed, the following actions take place:
- Deconstruction of the structure
- Acquiring a CC
- Building the new structure
- Getting an OC
- Changing the existing members
Complaints in Redevelopment:
In Maharashtra, several redevelopment schemes for buildings owned by co-operative housing societies are being implemented. The administration of co-operative societies undergoing renovation is the subject of several complaints from Housing Societies, the Housing Federation, and individual members. A majority of complaints fall under the following categories:
- Lack of due consideration for members throughout the redevelopment process.
- Opaque tendering process.
- Developers are appointed arbitrarily.
- Not coordinating the work done by the architects and project consultants.
- Conducting business in contravention of the co-operative law, rules, and by-laws.
- Failure to implement a fair contract-awarding process.
- Agreements with developers lack parity.
MahaRERA Activity:
The State Government established the MahaRERA to safeguard the interests of consumers. Residents of housing societies who are in conflict with their developers over redevelopment problems are not eligible for relief under this Act.
A complaint of a housing society member against their developer for neglecting to deliver newly renovated flats for 11 years was recently dismissed under this Act. MahaRERA ordered that it was not the correct venue to resolve the society's dispute with the developer because the complainants could not identify any violations of the RERA act 2016.
According to the MahaRERA ruling, the conflict between ordinary citizens, the landowner and the developer do not violate MahaRERA provisions.
Given that redevelopments account for more than 85% of all building projects in Mumbai, the above order that denies any help to the appellants will have broad ramifications. Housing experts caution that MahaRERA would not provide relief for thousands of land owners stuck for years because their redevelopment projects are delayed. This is a noticeable gap, as it is believed that dishonest developers would take advantage of this weakness. At the same time, other members will continue to suffer, and any rule that does not defend the victims’ rights will be seen as worthless.
Self-Redevelopment: A Better Approach
Due to delayed project delivery and a lack of faith in developers, several housing societies in Maharashtra have been compelled to turn to self-redevelopment. This method ensures time-bound, cost-controlled, and predictable outcomes. More than 750 housing societies have decided to undertake self-redevelopment in Mumbai alone.
With a Government resolution, the Maharashtra government unveiled the self-redevelopment programme for housing societies in September 2019. The goal is to allow local authorities to take charge of the reconstruction process. The responsibilities range from hiring a qualified architectural or construction company and supervising the construction to selling the extra real estate built and splitting the earnings equitably. The autonomy of the process ensures excellence in every way; society members would profit from high-quality building work, contemporary amenities and infrastructure, and time-bound and cost-bound construction. Additionally, by removing the developer from the process and maintaining RERA rules for society handover, there would be no chance of fraud, slowed construction, or loss of space. Landowners can expect an increase in carpet area of up to 40–50% rather than only 15-20%.
New FSI Rules in Mumbai For Redevelopment
In Mumbai, redevelopment and building of high-rises are now possible because of changes to the regulations governing unified development control and promotion (DCPR). Older buildings' permitted FSI (Floor Space Index), which was once 50%, decreased to 10% in the previous year. However, the original FSI of 50% has now been reinstated.
High-rises can now be built in Mumbai since the restriction on building height has been raised from 24 to 70 metres. According to new FSI rules in Mumbai for redevelopment, approved FSI (1.1) with 0.5 Premium FSI will be given for general redevelopment. Besides this, the general redevelopment also gets permissible TDR and 60% ancillary FSI. When redeveloping dangerous buildings, a 50% incentive FSI is added with general redevelopment FSI. Additionally, roads that are 9-metre-wide will be considered 12-meter-wide, and structures may be up to 70 metres tall.
Conclusion:
The worst aspect of this transition from "old to new" is that hundreds of rehabilitation projects in Mumbai are hampered by corruption and excessive delays in their completion. This issue is not taken seriously by MahaRERA. As a result, every developer and promoter looks for a loophole to exploit.RERA rules for redevelopment need to be updated to address this issue, and these rules must also apply to redevelopment. Visit Tata Capital to get affordable Home Loan.
25 July 2022
5 mins read
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