Redevelopment FAQs

The MRTP Act was enacted to provide for proper development and use of land situated in the State of Maharashtra. The MRTP Act also provides for setting up a Planning Authority which shall be a local authority which  is inter alia responsible for making and revising development plans.

Re-development falls within the definition of “development” as per MRTP Act. Therefore, the Society and/or the developer needs to obtain prior permission of the planning authority under whose jurisdiction the building to be redeveloped is situated.

If the building is situated in Mumbai, the concerned authority may be the Municipal Corporation of Greater Mumbai or any other special authority such as the Mumbai Metropolitan Region Development Authority, Maharashtra Housing and Area Development Authority, Maharashtra Industrial Development Corporation, Slum Rehabilitation Authority.

The MMC Act was passed to regulate the executive actions of the Municipal authorities of the city of Mumbai. It provides the duties and powers of the MCGM and the Commissioner. The MCGM is bound to make provisions for matters such as drainage facilities, economic and social development, water supply and public streets in or for the city of Mumbai.

As per MMC Act, every person who intends to construct a building has to give a notice of such intention to the Commissioner along with the necessary details such as dimension and purpose of the building. Chapter XII of the MMC Act’ contains detailed provisions in respect of construction of such building and regulates matters such as height, materials to be used in roof and external walls, set-back area, commencement and completion of work. Consequently, provisions of MMC Act will be applicable to re development also.

RERA was passed to regulate and promote the real estate sector and protect the interest of consumers who were to acquire property in such real estate projects. It aims at bringing about transparency by mandating registration and disclosure and it also seeks to ensure timely completion of real estate projects and sufficiently compensating consumers in case the projects are not completed on time.

Re-development falls within the definition of “development as per RERA and prior registration of a real estate project with MahaRERA is compulsory for marketing or selling or offering for sale an apartment or building proposed to be constructed in such project. However, if the real estate project is being undertaken for renovation or re development and no apartment, plot or building are being marketed, advertised, sold or allotted then the re development project would not require registration with MahaRERA

DCPR is a set of regulations which are applicable to all development, redevelopment, erection and/or re-erection of a building, change of user well as to the design, construction or reconstruction of, and additions and alterations to buildings in the areas within Mumbai.

The procedure for re development is provided in the directives issued by the Government of Maharashtra under section 79.A of the Act vide Government Resolution dated 4th July, 2019″ (“Government Resolution”), Copy provided in Annexure 1. This Government Resolution is applicable to all forms of re-development including chanter development, self re-development and re development through developer. Some of the key directives are at follows:

  • Requisition for convening Special General Body Meeting for redevelopment of Society’s building ar well as the business to be transacted and resolution to be passed thereby
  • Creation of website for the sake of transparency by the society to upload all the details in regards to redevelopment, like notices, minutes and reports of Project Management Consultant etc., on the said website.
  • Appointment of Architects/PMC and the work to be undertaken by them.
  • Preparation of tender documents, invitation of offers, selection of tenders and appointment of developers.
  • Execution of Development Agreement with the developer and the points to be included in the agreement.

Re-development is the process of reconstruction of a residential or commercial premises. In this process, the existing building is demolished and a new one is constructed after the appropriate approvals are obtained from the planning authority. For buildings situated in Mumbai, such authority would be the MCGM or any other designated special planning authority.

In consideration for re-development rights, the existing members of the Society, along with several other benefits, also receive new flats in the redeveloped building of an area usually more than the area of their existing flats.

The following buildings are generally redeveloped:

  • The buildings that are very old and require repairs and renovation every 5 years; in such circumstances the cost of repairs is high and such buildings must undergo re-development.
  • If the Society has unutilized F.S.I, such unutilized FS.I can be consumed by the Society for developing their existing building.

If the Society decides to go ahead with re-development, it can do so by adopting any of the following methods:

  • Self-development The Society can take up and finance the project themselves by appointing a contractor for reconstruction of their building The member of the Society shall acquire new flats in lieu of their existing flats as agreed between themselves.
  • Society can grant the development rights t the developer: An arrangement is entered between the Society and the developer whereby the Society grants to the developer, the re-development rights Accordingly, the developer shall reconstruct the building of the Society and provide the members with premises in the new building in lieu of the existing praises as per the terms of their respective
  • Outright sale to the developer: The developer purchases the premises from each member for a consideration and redevelops the building In such a case, the Society is dissolved and the members thereof shall not receive any premises in the new building

CDS means any scheme for redevelopment of a cluster of buildings and structures over a minimum area of 4000 sq.mtrs. in the island city of Mumbai and 6000 sq mtrs. in the Mumbai suburbs & extended suburbs, bounded by existing distinguishing physical boundaries such as roads, nallas and railway lines etc. Reg. 339) of DCPR sets out detailed provisions for the same.

Redeveloping a building may be beneficial to the Society and members thereof in the following manner:

  1. Structural repair is not economically feasible and repairing the old buildings is only a temporary solution as these buildings need extensive repairs and renovation. Repairs and renovation are an added financial burden and also a threat to life of the members of the Society. Due to lack of funds and technical expertise, re-development is a viable option.
  2. Additional area will be received as compensation from the developer.
  3. The developer is also likely to offer consideration in the form of corpus funds to the Society, which can then be utilized by the members towards the maintenance of the new re-developed buildings.
  4. The members of the Society can enjoy modern amenities like a gymnasium, health club, additional car parks, high-end security systems and modern elevators in the new redeveloped buildings.

F.S.I is a ratio that indicates how much area can be built or developed on a plot of land. It is also known as Floor Space Ratio or Floor Area Ratio. Example: If the FSI of a locality is 2.5 and the area of the plot is 5000 sq. mtrs, then the building which is to be constructed on the said plot can have a total BUA of not more than 12,500 sq. mtrs. Alternatively, if we want to understand how much FSI has been consumed by a building on a plot, w divide the total BUA of all the floors of the building by the total area of the plot.

The F.S.I available in any area/locality in Mumbai will be provided in the DCPR.

TDR on the other hand, is a benefit in form of FS.I and refers to the development potential of a plot which could not be utilised on that plot due to certain restrictions (for example: lands acquired under reservation for public purposes like new roads, road widening, school, hospitals etc., height restriction near airport; un-utilised ES.I in case of heritage property as restrictions imposed on it etc.) and is accordingly transferred to be utilized for construction elsewhere i.e. on some other plot.

Since the E.S.I and TDR available on a plot will depend on which area of Mumbai is the building situated and its corresponding provision in the DCPR, the incentive available will be different in each area. However, generally, where existing members are proposed to be re- accommodated on the same plot, subject to other conditions, the incentive additional BUA to the extent of 15% of the existing BUA or 10 sq. mtrs. per tenement, whichever is more, is permissible without premium”.

As stated above, the benefit of re-development includes being allotted parking in the new building to be constructed. Accordingly, DCPR provides that for re development under DCPR Reg. 33(7)(B) at least one parking space is to be provided for every:

(a) 4 tenements having carpet area up to 45 sq. mtrs. each.

(b) 2 tenements with carpet area exceeding 45 sq. mtrs. but not exceeding 60 sq. mtrs each. Provided further that in case of (a) & (b), at the option of owner/developer, may provide one parking for each tenement.

(c) 1 tenement with carpet area exceeding 60 sq. mtrs but not exceeding 90 sq. mtrs.

(d) 1/2 tenement with carpet area exceeding 90 sq. mtrs In addition to the parking spaces specified in (a), (b), (c) & (d) above, parking space for visitors shall be provided to the extent of 25% of the number stipulated above, subject to minimum of one.

The Society has to appoint government approved structural engineers/architect to conduct a structural audit of the building, once every 5 years when the age of the building is 15-30 years and once every 3 years when the building is more than 30 years old”. The report of such structural audit would reveal the condition of the building and indicate whether the Society needs to undertake re development.

If the structural report suggests that the building needs to be redeveloped and cannot be restored, the Society should consider re-development.

Apart from the structural audit report above, which is obtained by the Society, in the event, MCGM declares the building of a Society as dilapidated, dangerous for habitation, danger to the passers-by or any structure or place in the neighbourhood or issues a notice for corrective repairs”, in such case also, the Society should consider re-development.

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