Development/Redevelopment of Housing Schemes of MHADA

Development/Redevelopment of Housing Schemes of MHADA

mhada buildingBy Accommodation Times News Service

1) The FSI for a new scheme on vacant lands of low Cost Housing Scheme for Economically Weaker Section, Low Income Groups and Middle Income Groups of MHADA having at least 60 percent built-up area of the tenements under EWS, LIG and MIG categories, shall be 2.50

2) For redevelopment of any existing housing scheme of MHADA, undertaken by the MHADA departmentally or jointly with societies /occupiers of buildings or housing societies/ occupiers of building or by lessees of MHADA or by developer, the FSI shall be as under.-

a) Total permissible FSI shall be maximum 2.5 on gross plot area.

b) The incentive FSI admissible against the FSI required for rehab shall be as under:-

i) In congested area, for the area upto4000 sq. m., the incentive FSI admissible will be 50 percent.

ii) In congested area, for the area above 4000 sq.m. the incentive FSI admissible will be 60 percent.

iii) In outside congested area, for the area upto 4000 sq.m, the incentive FSI admissible will be 60 percent.

iv) In outside congested area, for the area above 4000 sq.m., the incentive FSI will be 75 percent.

c) Difference between 2.5 FSI and the FSI required for “rehab + incentive” shall be shared between MHADA and Occupiers Society/ developer in the ratio of 2:1

d) In the scheme, for the land allotted for societies of MIG and HIG and developed plot allotted individually to MIG and HIG group, the permissible FSI shall be as per prevailing Development Control Regulations

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Self Development of Society Buildings

Self Re-Development of housing society buildings

self redevelopment of the societyBy Accommodation Times News Service

SELF DEVELOPMENT OF SOCIETY BUILDINGS:

01.   Majority of the residential buildings, in Mumbai, are literally above 50 years old.  Some are literally dilapidated and some are in dire need for large scale repairs.  Wherein in both such eventualities, very large sums of money is needed to redevelop such buildings.  Further in such Society’s Balance Sheet, there are hardly any funds accumulated over these 50 odd years, for Major repairs, thus forcing the society residents to continue living in such dilapidated and structurally weak buildings.

a)       Due to monetary reasons, the residents have to redevelop their buildings either through a Builder /Developer .OR.  consider the self-redevelopment of their buildings themselves, with the help of experienced and relevant Professional Consultants of the field, which includes Civil Consultants, Financial Consultants and Institutions, Legal Consultants and so on ….

b)       With appropriate guidance, patience, trust and mutual understanding, the Society can consider for “Self Re-Development” of their buildings, which in turn translates into substantial savings and earnings for the Society Members, in terms of permanent “Corpus Fund” in the Balance Sheet, of such Societies, which again in turn translate in lowering down maintenance bills of the members.

c)        Self-Redevelopment of Society buildings can be conducted easily & successfully, with proper planning and strategy, after keeping confidence and by taking help of experienced and relevant Professional Consultants of the field.

d)       Redevelopment has become further necessary and inevitable, due to BMC directions on Structural  Safety and repairs of 30+ year old buildings and discretionary authority available with BMC, to vacate dilapidated buildings.

 

RE-DEVELOPMENT THRU BUILDERS /DEVELOPERS:

02.  Typically most societies prefer to Redevelop their buildings thru Builders, after weak negotiations and still very weak agreements with the Builders.

a)      These leads to mismanagement

b)      Allegations of Corrupt practices and underhand dealings

c)      Builders take liberty and change Building development Plans, for their vested interests

d)      Original members remain at the mercy of Builders for completing their Building.

e)      Builders tend to usurp and sell common spaces

BENEFITS OF “SELF-REDEVELOPMENT” PROCEES:

03.  The Housing Society’s may consider various benefits that can be derived from “Self Redevelopment” procedures.

a)      Building Plans will not be changed, without ALL “individual” members consent

b)      Corpus Fund can be accumulated at more than 2 times vis-a-vis builders offers

c)      Building will be designed & developed by the members themselves and in their presence, without any hindrances

d)      Members may use their discretion to develop their residential buildings into residential cum commercial buildings, which has its own advantages, in terms of money and facilities.

e)      With the advent of latest Directions by the Coop. Dept., the members may use their discretion to install Mobile Towers, Advertisement Hoardings, Solar Systems, Wind-Mills, Club House, STP, Swimming Pools and other facilities and amenities, which translates into more in-house amenities.

f)       BMC “Occupancy Certificate” will not be a problem, since the members will develop the buildings, ONLY as per approved plans.

g)      Building will be developed on time schedule, unlike the builders who usually delays the project for his own vested interests.

h)     Free Sale Flats, can be purchased by the original members, on costing basis

i)        Free Sale Flats, can be sold and restricted to certain categories

j)        Issue of Free Parking spaces can be solved

k)      Common Spaces cannot be sold and under-hand dealings can be avoided.

l)        Merging (amalgamation) of Two flats is possible, at Building Planning stage.

m)   Buildings can be completed before schedule, thus saving Rent for members

SOME DISADVANTAGES OF “SELF-REDEVELOPMENT” PROCEES:

04.  Like all other difficulties in life, Self-Redevelopment also has some lacunas:

a)      Needs Time, Inclination, Money & Energy (T.I.M.E.)

b)      Needs “24 x 7 x 365” Professional Back-up. However this is not a major issue due to the availability of Professional Consultants, atleast in Mumbai.

c)      Issue of Finance, for Construction Cost for Self-Redevelopment.

d)      Since Self-Redevelopment is not practiced widely, Society members are highly apprehensive in terms of loss of self-confidence, trust and mutual understanding.

 

CORPUS FUND:

05.   Typically in Redevelopment thru Builders, the Society members are paid some money in terms of “displacement fund alias Corpus Fund”

a)      Sometimes this Corpus Fund is given to the Society, which the Society may secure it in its Balance Sheet, for appropriate investment, for purposes of earning Interest.

b)      Sometimes this Corpus Fund is given to individual members.

c)      In terms of SELF-Redevelopment, the criteria of Corpus Fund can be generated from Sale of the Free-Saleable Flats,  which would be constructed over and above the number of flats for its original members /residents.

d)      With prior & appropriate mutual understanding and trust, the original members may mutually decide to appropriate such Corpus Fund, generated thru Self-Redevelopment process, for mutual benefit of the Society.

 

RENT CHARGES:

06.  Typically in Redevelopment process thru Builders, the Society members are paid “Rent” money for alternate accommodation till the Redeveloped flats are duly taken over by the original members.

a)            In terms of SELF-Redevelopment, the criteria of “Rent” money for alternate accommodation till the Redeveloped flats are duly taken over, is a major issue, which needs to be decided with appropriate mutual understanding and trust.

b)            However this Rent Charges, can be adjusted subsequently from the accumulated Corpus Funds, generated from Free-Sale Flats

 

EXTRA AREA:

07.   Members may mutually decide to avail the percentage of extra area and the area of Free-Sale Flats,  since this can be turned into Society’s advantage, in terms of Corpus Funds generated from Free-Sale Flats.

 

SHIFTING /LOGISTIC CHARGES:

08.  Typically in Redevelopment thru Builders, the Society members are paid “Shifting /Transportation” money to the alternate accommodation till the Redeveloped flats are duly taken over by the original members.

a)      In terms of SELF-Redevelopment, the criteria of “Shifting /Transportation” money for alternate accommodation till the Redeveloped flats are duly taken over, is a major issue, which needs to be decided with appropriate mutual understanding and trust.

b)      However this Shifting /Transportation  Charges, can be adjusted subsequently from the accumulated Corpus Funds, from Free-Sale Flats

 

STAMP DUTY & REGISTRATION FEES:

09.  Typically in Redevelopment process thru Builders, the builders pay the Stamp Duty and Registration Fees, for the new Flat Agreement of the original members, subject to various parameters.

a)             In terms of SELF-Redevelopment, the criteria of “Stamp Duty and Registration Fees” money for the new Flat Agreement of the original members, is a major issue, which needs to be decided with appropriate mutual understanding and trust.

b)            However this Stamp Duty and Registration Fees, can be adjusted subsequently from the accumulated Corpus Funds, from Free-Sale Flats.

 

OCCUPANCY CERTIFICATE (OC):

10.  Typically in Redevelopment thru Builders, the builder takes adequate liberties to conduct several lapses (illegalities), consequent to which the BMC does not grant “Occupation Certificate (OC) “, which in turn means double the rate of water-charges for all residents of the building.

a)         These lapses (illegalities), can be easily avoided and stopped, when the building is developed on “Self Re-Development” basis.

b)         An “Occupation Certificate (OC) ” also means higher Sale-Value of the Flats and easy Bank-Loans for buildings granted with Occupancy Certificate.

 

COSTING OF REDEVELOPING BUILDINGS:

11.  The typical cost of construction is approximately between 1200/- to 2200/- per CARPET square feet (depending on location and luxuries being provided).    This “includes” charges for Development permission from BMC, all Professional Consultants fees and other incidentals.

a)       The “Free-Saleable Area” is sold by the builder,  approx. between 10,000/- to 25,000 per CARPET square feet (depending on location and luxuries being provided).

b)       The tentative earning the Builder earns out of each Carpet square feet is approximately 7000/- to 20,000/- per CARPET square feet (depending on location and luxuries being provided).

c)        This also means that to construct ONE Flat of approximately 1000 square feet (carpet area), the all-inclusive construction cost is approximately Twenty (20 Lakh rupees) in Mumbai Suburban area, which includes all costing’s.  This is possible if the Conveyance of the plot of Land, is in the name of the Society.

d)       The above translates into Construction Cost of approx. Twenty (20 Crore rupees) in Mumbai Suburban area, for constructing 100 flats of approx. 1000 square feet each (carpet area).

e)        Presuming that out of 100 Flats, 50 flats are to be given to original members, there remains 50 Flats for “Free Sale” (Free-Saleable Area), which can easily be sold for Two Crore each, thus translating to 100 Crores in terms of Sale-Price.

f)         Presuming further that cost of construction of 20 Crores is reduced from the 100 Crores received from “Free Sale” by the Society, there still remains approx. 80 Crores of Gross Profit.

g)       The above in turn translates into huge Corpus Fund to the Society, when in terms of Self-Redevelopment of their own buildings.

h)       The above also means that if the Redevelopment is conducted by Builders, the Society would not earn /save the huge potential of Corpus Fund and translating the interest received on such Corpus Fund, into reducing their own Society maintenance charges.

 

GOVERNMENT POLICY:

12.   As a Public spirited legislature, AND in the larger interest of the residents of old /dilapidated buildings, the Maharashtra State Govt., would do well to consider to grant “Conveyance” of the Society plot in the name of the Society, by legal default, via a special ordinance, atleast to those Residential Societies which are over Forty years old.

This may be specially considered in view of the vast amount of Stamp Duty and Registration fees that will be accumulated by the Govt., due to registration of the new redeveloped flats.

 

CONCLUSION:

IF THERE IS A WILL, THERE IS A SURE WAY:  MEANS YOUR WAY.

http://accommodationtimes.com/index.php/self-re-development-of-housing-society-buildings/


HC concerned over cases of forcing tenants to vacate old buildings

A division bench of Justice V M Kanade and Justice A K Menon said, “What we have noticed that such cases are increasing, where certain developers are forcing tenants of old buildings to vacate their residences against their will.”

 They said, “creating such situations and forcing the tenants to vacant they residence is not correct and it has to stop.” 

Elaborating more over their problem Rima states in the petition that, the buildings water on the terrace is damaged and is leaking causing damage to the building, since, four years he has occupied the premises the developer has not done any repairing and nor he is allowing them to repair it. The leakage is causing severe damage to the building.

Click Here for the full story


HOUSING SOCIETY MATTERS – VOLUME – II – ISSUE NO. 10

We are extremely thankful to Ms.Heena Sampat for the complimentary copy of :

(23) HOUSING SOCIETY MATTERS – VOLUME – II – ISSUE NO. 10 – 01.07.2014 TO 15.07.2014

  • DEVELOPMENT RIGHTS – WHO ARE ENTITLE – SOCIETIES OR MEMBERS ?
  • Additional Area expected at Redevelopment
  • Corpus Money expected at Redevelopment
  • Rent for Temporary Alternative Accommodation including Deposits, if any
  • Hardship Allowance/ Compensation for Inconvenience.
  • Letters to : 1. The Hon’ble Minister for Co-operation, Govt. of Maharashtra, 2. The Principal Secretary – Co-operation, Govt. of Maharashtra, 3. The Commissioner for Co-operation & Registrar of Co-operative Societies, Pune, in respect of :
    • REDEVELOPMENT RELATED GUIDELINES NOT FOLLOWED BY PRACTICALLY EVERY DY. REGISTRAR.
    • DIRECTIONS BEING GIVEN BY DY./ASSTT, REGISTRARS TO COMPLY WITH ORDERS WITHOUT WAITING FOR THE STIPULATED APPEAL PERIOD DEPRIVING PARTIES THE RIGHT TO APPEAL.
    • REGISTERS TO BE MAINTAINED BY THE CO OPERATIVE DEPARTMENT.
    • ORDERS BEING PASSED BY OFFICERS OF THE CO-OPERATIVE DEPARTMENT ADMITTING PERSONS AS MEMBERS SIMULTANEOUSLY U/S. 22(2) AND/OR 23 INSPITE OF THE PURCHASER/OCCUPANT NOT PAYING THE DUES OF THE SOCIETY.
    • NEED FOR STANDING ORDERS & CLARITY ON VARIOUS MATTERS RELATED TO CO-OPERATIVE HOUSING SOCIETIES.
    • AMENDMENTS REQUIRED IN MCS ACT.
    • UPLOADING DAILY ORDERS PASSED BY OFFICERS ON INTERNET.
    • UPLOADING OF DAILY HEARING BOARD ON INTERNET.
    • MANDATORY CHECKING OF APPROX. 25% ORDERS OF JR. OFFICERS TO INTRODUCE INBUILT SYSTEM OF ACCOUNTABILITY.
    • PASSING OF BIFURCATION ORDERS AT THE DROP OF A HAT WITHOUT UNDERSTANDING THE IMPLICATIONS OF SUCH ORDERS.
    • AMENDMENTS REQUIRED IN MAHARASHTRA CO OPERATIVE SOCIETIES ACT.
    • INTRODUCTION OF SYSTEM OF WRITTEN ARGUMENTS BEFORE TAKING UP FINAL HEARING MATTERS.
    • APPOINTMENT OF ADMINISTRATORS / AUTHORISED OFFICERS.
    • MODIFICATION OF AUDIT FORM NOS. 1 & 28 SO THAT QUALITY TIME CAN BE SPENT BY DEPARTMENT STAFF AS WELL AS INCREASE THE COMFORT LEVEL OF SOCIETIES.

Click Here to read the entire interesting issue


Redevelopment Greed is making housing societies neglect maintenance & repair

Red alert! Redevelopment Greed is making housing societies neglect maintenance & repair

2 July 2014, Mumbai:  The return of monsoons is good news to everybody, but as always, there will be severe casualties in aging and ill-maintained buildings in every metro, including Mumbai. One may safely predict that at least five buildings will collapse in Mumbai alone, especially on the days with the heaviest rains, simply because of the additional weight of several thousand kilograms of absorbed rainwater that the dilapidated structures will have to bear. This weight is unevenly distributed on a weakened RCC structure, causing structural collapse.

 The following problems are perennial and systemic:

1)      The buildings of Mumbai and every other metro are aging. Every passing seasonal cycle of summer, monsoon and winter are causing further deterioration in the cement and steel of RCC structures by rusting and cracking. Therefore, every passing year, the load-bearing capacity of the RCC of every building deteriorates by small percentage like 0.2 to 1%.

2)      Older buildings deteriorate at a faster rate e.g. 1% per year. If they are well-maintained, this rate of deterioration may be reduced to 0.5%, effectively increasing its life span by many years.

3)      Unfortunately, many buildings have been made into “sick” buildings over the past decade by short-sighted cooperative societies neglecting them, in the lust for getting them declared as “dilapidated”, so that they go into commercial redevelopment. The load bearing capacity of the RCC of such buildings deteriorates by 5-10%. These buildings are like ticking time-bombs, waiting to collapse.

4)      In the monsoon, the rain-water seeps into the walls and ceilings of such neglected structures, increasing their weight by several thousand kilograms. This additional weight is distributed unevenly on the RCC frame, making it extremely vulnerable to sudden structural failure. These buildings cannot continue to be occupied. Ignoring them is a criminal negligence on the part of the government and municipal corporations.

5)      There is no civic body which has the necessary mandate for vacating and demolishing demolish hundreds or thousands of such critical buildings before they collapse due to “natural causes” in the coming monsoons. If such a body is not created, there is simply no alternative to redevelopment – whether voluntary or forced. These must be demolished and rebuilt under supervision of an empowered government body. Unfortunately, such an empowered body does not exist!

6)      A timetable for performing emergency repairs on thousands of other buildings is a must. These are not yet critical, they will inevitably become critical and dangerous if neglected for another 3-4 years. This must also be done under supervision of an empowered government body.

7)      Unfortunately, it is financially unviable for all the thousands of buildings of Mumbai to be redeveloped and rebuilt simultaneously. Therefore, a priority list will have to be made by the government agency after scrutiny.

8)      Many MLAs, MPs and corporators are builders, or have invested in building industry. These persons are aware of the deterioration, but they are using their knowledge for their own private benefit. The knowledge of these persons must be harnessed for public good. Unfortunately, such politicians are actively preventing any proactive planning from happening, for fear of harming their own interests!

9)      On a conservative estimate, more than 80,000 flats are lying vacant all over Mumbai. They belong to builders, estate agents and investors. Such flats should be requisitioned by the government and municipal corporations, and used for immediately resettling the people living in dangerous buildings.

10)   For all the above-mentioned work, which is urgent, new laws needs to be passed,and a new government agency is required to be constituted under the urban development ministry.

 

Problems Caused by Redevelopment Greed:

Since redevelopment started in 1991 about two decades ago, and builders could augment the FSI (Floor Space Index) of the land by purchasing TDR (Transfer of Development Rights), cooperative housing societies started neglecting their structures. Seduced by builders who promise larger houses and new buildings, building societies have been keen to steamroll opposition to their redevelopment proposals by individual members by deliberately allowing their building to deteriorate, so that structural auditors can declare them as “dilapidated”.

Earlier, it was a nightmare for a society to be told that its building was structurally unsound, and managing committee members and general body members alike were anxious to avoid it by regular re-plastering, painting and repairing. But in the last two decades, a report from structural engineers saying that the building is “dilapidated” or is in need of “major repairs” has been the dream-come-true of every managing committee, because it legitimizes their quest for redevelopment.

Redevelopment is a gravy-train by which everybody gets to make money, and especially civic authorities who give various building permissions, cooperative department officials, and the managing committees of societies. Many residential buildings aged around 30 and above would have been in a relatively better state, were it not for this lust for redevelopment. Despite a fair number of stalled redevelopment projects, and the opposition by cautious members in every society, the greed-is-good ethos of the majority of members in almost every society ensures that this gravy train is gaining momentum.

Brief overview of Mumbai’s redevelopment over the last two decades: http://tinyurl.com/History-Mumbai-Redevelopment

Over 10 percent of Mumbai’s 30,000-odd society buildings are currently suffering from varying degrees of redevelopment-driven neglect by their managing committees, which collect money for their Repair Fund and Sinking Fund every month, but never spend for repairs and maintenance, Hoping to reap windfall gains from redevelopment, the managing committees favour a dilapidated appearance, which sends a come-hither signal to builders.

Sadly, every such society will not enter into the process of redevelopment swiftly; the overwhelming majority of old buildings will have to wait for many years before their redevelopment happens. Hence, residents are condemned by their greedy and negligent managing committees to live for long in buildings with fast-deteriorating RCC columns, beams and slabs.

In every society, one or two people are fighting a losing battle against this commercially-driven madness. They are seeking better maintenance of their societies.  Most often, their voices are raised only at meetings, and this makes them pariahs. Far from recognizing that their words are in the common interest, a majority of their neighbours consider them mad, and shun them. Their managing committees are quick to paint them as anti-social villains opposed to the prosperity that will be brought about by redevelopment.

One such person is Rohit D’Souza (9819199863rohitpdsouza@gmail.com), a young sportsman of Mulund. Due to the constant leakage and seepage from the rooftop tank, and the consequent rusting and deterioration of the building structure, Rohit and his neighbours fear for their lives, and have written many letters to their building secretary and to to MCGM’s Ward Officer for T-Ward.  But their letters may as well have been written by residents of thousands of other residents of Mumbai, who are in the same boat: http://tinyurl.com/Please-repair-tank

 

Numerous societies are in exactly the same boat. Improper structural maintenance by societies due to greed, cost cutting, ignorance, unavailability of skilled labourers, disputes between members etc. is endangering the lives of thousands of families living in Mumbai. The steel in the RCC columns, beams and slabs has rusted and become exposed in many buildings, and Rohit’s building is only a sample of what thousands of buildings are currently looking like. Like Rohit, lakhs of people in Mumbai region are saying, “We are not opposed to redevelopment per se, but we are definitely opposed to the deliberate neglect of our buildings, which is a growing threat to our lives.”

But are the government and municipal authorities listening? And more importantly, are the managing committee members listening?

Or will they, like the Municipal Corporations of Mumbai, Mumbra, Thane etc. wake up only after the building crashes down?

Issued in Public Interest by

Krish

9821588114

Building.RTI.Union@gmail.com

PS: After reading this, if residents of societies wish to gently start reminding their societies to maintain the building, they may use this word file as a format: http://tinyurl.com/sample-letter-to-society

 


Consent of all flat buyers needed to change plans

Irrevocable blanket consent taken from flat buyers will not help builders who want to construct additional floors that were not mentioned in original plans at the time of sale, the Bombay high court (HC) has said.
“No such irrevocable consent can be imputed or taken since express previous consent is required to be obtained for all additions and alterations after the plans and specifications (of the building) are disclosed,” said Justice Roshan Dalvi. “No such consent can be expressly given and every (developer) would be required to take express previous consent of all the flat purchasers for all such additional construction… not incorporated in the approved plans.”
The HC upheld a civil court order restraining city-based builder Shah and Modi Developers from adding more floors to Swapnalok building in Malad. Advocate S C Naidu, counsel for the developer, said there was express consent given by the flat buyers at the time of purchase that no permission would be required from them if the developer wanted to make any additional construction and they would not raise any objection.
The judge said that such a clause was “wholly inconsistent with and contrary to legislative mandate” of section 7 of the Maharashtra Ownership of Flats Act. The provision says that a builder has to take the consent of all flat buyers for making any alterations in or additions to the structure of the flats or of the building after plans and specifications are disclosed at the time of sale.
Shah and Modi cited another clause in the agreement which mentioned that the developer can acquire additional construction rights in the form of TDR (transfer of development rights) to add floors. They also pointed to the foundation plan of the building, which showed that it was capable of bearing up to six floors.
But the HC said this did not constitute express consent and the approved plan disclosed at the time of purchase was admittedly up to four floors.
“Upon seeing the lack of consent… a prima facie case for restraint on further construction is made out,” said the HC while dismissing the builder’s plea to vacate a stay on construction from the sixth floor onwards.

For the Times of India story – Click here

For the judgement of the High Court given by Justice Roshan Dalvi – Click Here


IT – Assessment of Real Estate Developers and Members

A very interesting detailed analysis for Builders and Real Estate Developers including aspects of Taxation for members such as

Liability of Income/Capital Gain Tax, if any, on:-

  1. Additional area in the hands of individual members.
  2. Cash compensation received upon surrender of entitled additional area, in part or in full, by an individual member.
  3. Corpus Money received by the individual members from the Developer in lieu of surrender of part entitlement of FSI/Development rights.
  4. Corpus Money received by the Society from the Developer  and subsequently distributed to its members.
  5. Rent for Temporary Alternative Accommodation including Deposits, if any.

all this, along with important decided case laws

Click Here for the detailed analysis –

http://www.accommodationtimes.com/real-estate-news/course-on-assessment-of-builders-and-real-estate-developers-2/