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NEW REDEVELOPMENT RULES

UNDER SECT.79 (A) OF MCS ACT, 1961

W.E.F. 4Th JULY, 2019

 

Redevelopment of properties of old and dilapidated buildings has been a subject of great interest since last many years both for the tenants/members and the Developers as well. With the real estate prices touching a new high, residents in old buildings are now discovering that they have an opportunity to unlock immense value from their property by offering it to the Developers for redevelopment.

However, there are many factors/questions that arise during the ongoing process of redevelopment and hence, the Government of Maharashtra, Co-Operation, Marketing and Textile Department, Mantralaya, pronounced a modified and new policy on redevelopment of old and dilapidated buildings wide its recent Government Resolution (GR) No. सगृयो-2018/प्र.क्र. 85/14-स Dated 04 July, 2019 issued under Section 79 (A) of Maharashtra Co-operative Societies Act 1960 modifying the earlier Directives issued wide its No. सगृयो-2007/प्र.क्र.554/14-स, CHS 2007/CR554/14-C Dated 3.1.2009.

These new redevelopment rules shall be applicable to all types of redevelopment projects in the State of Maharashtra undertaken under various provisions of DCPR 2034 like self-redevelopment, by appointing a contractor to carryout redevelopment, tenanted premises, cluster redevelopment, redevelopment through the Developers or redevelopment undertaken by Federations and many more types. The earlier Directives dated 3.1.2009 were applicable only for the redevelopment projects undertaken exclusively through the Developers.

It is expected that the new Directives are to be diligently followed by all concerned while any project that is proposed for the redevelopment. The Directives as contained in the original GR in Marathi by the Government of Maharashtra are for its prompt implementation.

KEY FEATURES OF NEW REDEVELOPMENT RULES

The key features of new redevelopment rules have been appended below. However, the Societies and all other concerned are requested to follow the original Government Resolution (GR) reproduced at the end of this article to have word to word awareness and understanding about the new redevelopment rules for its scrupulous implementation.   

To begin with the redevelopment proposal, the Competent Authority shall declare that the building is in the state of collapse or danger for rehabilitation then the Society can take decision regarding redevelopment in the Special General Body Meeting (SGBM).

These Directives are applicable to redevelopment projects undertaken by the Developers through the execution of the Development Agreement or by appointing the Contractors for the projects under self-redevelopment as also cluster redevelopment in the Federal Society or redevelopment through the group of the Societies etc.

Authorized Officer or the Administrator appointed by the Dy. Registrar to look after the working of the Society shall not have any power to take the decision of the redevelopment of the property of the Co-operative Housing Societies.

Not less than 1/5 of the members of the Societies shall submit requisite application for calling SGBM to decide to undertake the redevelopment of the property of the Society.

The Secretary of the Society after taking note of it in the Managing Committee Meeting within 8 days shall call SGBM within 2 months.

The Society shall call at least 3 quotations for preparing Feasibility Report from Project Management Consultants (PMC) who are on the panel of Government/Local Authority and one expert PMC amongst them shall be selected in the SGBM. The Agenda of the SGBM shall be circulated to the members before 14 days with due acknowledgement obtained.

For the information of all the members, the Society shall create a website and upload therein the Feasibility Report received from PMC as also periodically update the website with all the information related to the redevelopment like Notices, Minutes of various Meetings of the Managing Committee, SGBMs etc. The Dy. Registrar shall be informed of the creation of the said Website with its URL. 

Notices and Minutes of the SGBMs shall be sent to the members by e-mail/in person or by Registered Post as also shall be placed on the Notice Board.

The quorum of the SGBM shall be 2/3 of the total number of members of the Society. If no quorum then the said SGBM shall be adjourned and shall be again scheduled within next 1 month. If again no quorum then the said SGBM shall be cancelled by assuming that the members are not interested in redevelopment and the said subject shall not be brought for the approval before the SGBM for up to next 3 months.

At the said SGBM, the decision regarding the redevelopment shall be taken with not less than minimum 51% of the total number of members physically present and select an expert and experienced PMC, fix the scope of work with terms and conditions followed by a letter of acceptance from PMC.

Any type of consent, opinion, remarks whether written or oral submitted by any absentee member shall not be considered by the said SGBM.

Thus, the said decision shall be approved by the majority of not less than 51% of the number of total members of the Society present at the said SGBM out of minimum of 2/3 number of members present at the SGBM to fulfil the quorum. The Managing Committee shall obtain written Consent Letter from the members agreeing for the redevelopment.

The Minutes of the SGBM shall be communicated to the Dy. Registrar within 15 days of the said SGBM through e-mail and hard copy.

SGBM shall select an expert and experienced PMC from the panel with the Government/Local Authority for redevelopment and shall determine their scope of the work with terms and conditions.

A Letter of Appointment shall be issued to the selected PMC within 30 days from the date of SGBM held and a Work Contract Agreement shall be executed by the Society with PMC detailing therein, the terms and conditions approved in the SGBM.

The Secretary shall prepare the Minutes of the SGBM and circulate the copy of it to all members within 7 days from the date of the said SGBM held with a copy to the Office of the Dy. Registrar.

The PMC shall conduct the survey of the building and land of the Society, verify the records of conveyance of land and shall gather the information about FSI and TDR available as per the existing policy under DCPR 2034 and MHADA Rules.

PMC shall prepare Feasibility Report with details like commercial area, open land, garden area, parking, specifications of construction etc. within two months from the date of their appointment and the same shall be submitted to the Society.

The PMC shall prepare Draft Tender and the terms and conditions and other details shall be fixed. The PMC shall invite Tenders for getting competitive offers from the Developers by fixing/locking the quantum of either Carpet Area or the Corpus Fund (not changeable) in the Draft Tender.

The members of the Society can recommend to the renowned and experienced Developers known to them. In case of the Self- Redevelopment also, while preparing the Feasibility Report and inviting Tenders from the Contractors, the Society and PMC shall follow the same procedure mentioned above.

The Secretary of the Society shall prepare the list of the Tenders and publish the same on the Notice Board of the Society. The PMC shall prepared comparative chart of the Tenders that are received and if minimum 3 Tenders received, the approval shall be given for the acceptable Tender by the SGBM.

To select the Developers from the Tenders selected, an Authorized Officer from the Dy. Registrar’s Office shall be invited for attending the SGBM with an arrangement of video shooting of the entire proceeding of the said SGBM. None other than the bonafide members shall be allowed to be present in the said SGBM with their identity cards verified. It is necessary that minimum one project of the selected Developers must have been registered with MahaRERA. 

The quorum of the SGBM shall be 2/3 of the total members of the Society for selection of the Developers. A comparative data regarding the Tenders selected shall be presented in the SGBM and an eligible Developer shall be selected with the terms and conditions as prescribed in the Tender.

It shall be necessary to take written consent of not less than minimum 51% members of the total members of the Society present in the SGBM for the appointment of the Developers.

The Development Agreement with the Developers shall be executed within 3 months with the assistance from the PMC in accordance with the terms and conditions approved by the Society with a specific mention of the completion period of the project of     redevelopment shall not be more than 2 years and in exceptional case not more than 3 years from the date of first Commencement Certificate (CC) issue by the MCGM.

The Developer shall provide 20% of the total cost of the redevelopment project as Bank Guarantee to the Society as also shall either provide residential facility to the members in the same area during the redevelopment period or shall pay a monthly rent and deposit or shall make available transit camps.

The Development Agreement, Power of Attorney and Permanent Alternate Accommodation Agreement (PAAA) with the individual member shall be registered under the Registration Act, 1908.

The flat buyers from the saleable quota of the Developers shall be admitted as members in the Society only after the completion of the redevelopment project and with due approval of SBGM.

Carpet Area shall be mentioned in the Agreement as per the provisions under the MahaRERA Act. The development rights given to the Developers shall be non-transferable. The members shall vacate and handover their flats for the redevelopment only after all legal approvals are sought from the competent authorities and the tripartite PAAAs are executed with the individual members.

Any dispute that arises shall be settled as per the provisions under Section 91 of the MCS Act. After the Occupancy Certificate (OC), received, the allotment of flats shall be preferably as per the existing floor number and if it is necessary to allot the flats by lottery system, it shall be arranged in the presence of the Authorized Officer from the Dy. Registrar’s Office with video shooting of the said proceedings. Thus, the Authorized Officer from the Dy. Registrar’s Office shall remain present at two SGBMs i.e. (i) at the time of selecting the Contractor for self-redevelopment or the selection of the Developers and (ii) at the time of allotment of flats.

Any member or his relative or any of the Office Bearers shall not be the selected as the Developers.

Building plans sanctioned by the MCGM shall be placed before the SBGM for information and a certified copy of the same on demand by any member shall be provided by charging prescribed fees.

Cluster Redevelopment through the Co-operative Housing Federation of the affiliated Societies in the name of Co-operative Housing Federation and having ownership rights of the common areas can be redeveloped.

The quorum for the SBGM arranged for the cluster redevelopment of the buildings affiliated to the Co-operative Housing Federation shall also be 2/3 of the total affiliated members of the Federation.

All the affiliated Societies of the Federation shall call for the SBGM of each Society for the redevelopment of their buildings. The SBGM of each Society by completing quorum of the 2/3 members of the total members of that Society, the resolution shall be passed by majority of the members present not less than minimum 51% of the total number of members of the Society.

Here also, the written/oral or any other type of approval, opinion, remarks of any absentee member in the SBGM shall not be considered.

Similarly, each Society by taking the written consent of all members voted in favour of the resolution passed, shall submit the same to the Managing Committee of the Federation or it shall be necessary to vote in favour of the resolution passed by the members not less than 60% of the total members together with all Societies affiliated to the Federation. After taking primary decision of the cluster redevelopment of the Societies as above, the further procedure shall be similar to the procedure of the redevelopment of the Co-operative Housing Societies mentioned above.

 

 

my name is Vijay

ONLINE REGISTRATION OF ALL REGISTERED HOUSING SOCIETIES IS COMPULSORY

The Government of Maharashtra, Co-operation Department has launched new website for creating online records of all types of Co-operative Society. Registrar of Society has informed all the Auditors regarding this. However, it has been noticed that either the Auditors have not informed the Societies of the Societies have neglected the same. Once again, the step by step guide is repeated for this process. The Registrar of Society would take stern action against the defaulting Societies in due course. To avoid such action, please upload your Housing Society information online in the following way.

Step 1: Visit the link:

https://mahasahakar.maharashtra.gov.in/Account/Login/Login.aspx

Step 2: Click NEW REGISTRATION [नवीन नोदणी कऱा]

Step 3: Select Account type as Society. Fill other detail and create an Account. [Just like we create our email account]

Step 4: Fill the Society detail

Note:-

a) Of Society Type selects depending upon your total member of members i.e. For 101 members to 500 members [100 व तायपेक्षा जाशत] OR for 10 members to 100 members [100 व तायपेक्षा कमी

b) In Society code write 6405 for Housing Society in Municipal Cooperation Area/Municipal Council Area & 6404 for Housing society in Gram Panchayat Area

c) For class of the Society, please write class given by the Auditors in the Audit Report like A or B or C

d) For Email ID: - If Society has an email id then write that else write email id of MC Member. This is must since you get the confirmation No from the government on this email id. & also if any wrong information as per government records then you will inform on this Email ID.

Step 5: Upload you Society Registration Certificate scan copy in PDF, JPEG format

If you don't understand how to fill the form then refer the User Manual. Please visit the link:

https://mahasahakar.maharashtra.gov.in/Account/Login/Society_Registration_User_Manual.pdf

For Society Code Please visit the Link:-

https://mahasahakar.maharashtra.gov.in/Account/Login/Society_Code.pdf

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CONSENT OF 51% FOR REDEVELOPMENT OF MHADA, CESSED, SRA AND SMALL BUILDINGS

 

To curb corruption and sabotage in redevelopment of all buildings, including private ones, the tenant consent clause has been relaxed. The State Government has approved Development Plan (DP) 2014-2034. However, the new DP 2034 has curtailed the rights of tenants residing in old residential buildings of Maharashtra Housing and Area Development Authority (MHADA), Cessed buildings and Slum Rehabilitation Authority (SRA) buildings. Earlier, to undertake redevelopment work of these buildings minimum 70% of tenants was required which has now been reduced to 51%. The reason given behind the move is to speed up the redevelopment projects in Mumbai city under the above scheme.

The Slum Redevelopment Authority (SRA) projects, however, will require consent from 70 per cent residents and they would be subjected to online clearance. If a Developer fails to start work within three months after taking up a project, the SRA will take over the work.

There is some good news for old societies, too. For private housing societies older than 30 years, 15% additional built up area will be allowed for each tenement without charging any premium. This will boost redevelopment of such societies too, as it will mean every tenant will get one additional room.

The new DP has moved the focus on island city again, while the base FSI has been kept the same to 1.33 in Island city, the maximum permissible FSI has been increased to 3, while there has been no change in the FSI in suburbs. Apart from the base FSI of 1.33, the Developer will be allowed to use TDR and also get additional FSI totalling up to 3 by paying a premium.

Earlier the usage of TDR was allowed only in suburbs and now it has been introduced it in the island city also. The reason is the population in the island city has been considerably reduced in the last few years and most development that takes place is redevelopment of old cessed buildings. This new FSI boost will help Developer to increase the scale of redevelopment.

In a further major relief for redevelopment of small buildings having fewer than 11 flat owners, now the requirement of consent of 51% would be enough instead of earlier of 70%. Most of the private smaller buildings registered under the Maharashtra Apartment Ownership Act (MAOA) shall now stand to benefit.

A minimum of 11 members is required to mandatorily register a housing society. Anything less than that means the tenement gets registered under the 1971 MAOA legislation.

The reduction in percentage of obtaining consent is to avoid delay in redevelopment projects. In other words, it has been decided to amend the MAOA so that instead of 70%, the flat-owners can go ahead with 51% consent. This move of government would certainly help people located in south Mumbai, Thane, Navi Mumbai and Pune.

Buildings which have been registered under the MAOA Act, including cessed buildings in south Mumbai, will benefit. With the Real Estate Regulatory Authority (RERA) in place, the government is considering amending both MAOA and the Maharashtra Ownership Flat Act (MOFA).

 

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REDEVELOPMENT, A DISGUST OF DEVELOPERS

Impending redevelopment projects shall be exorbitantly expensive now as the Maharashtra Government has approved a proposal to hike Ready Recknor Rates linked premium FSI rates i.e. 33% of TDR FSI to be purchased from the State Government for loading on redevelopment projects in Mumbai Suburban areas.

The redevelopment activities in Mumbai is going through a bad phase since the Developers are hard-caught in brutal financial and administrative crisis due to increase in project costs, mounting up of unsold stock, debt accruals, diversion of fund, increased cost of labour & material, delay in seeking approvals, frequent amendments in DCR, imperfect planning, litigation, violation of terms of redevelopment, unauthorised construction, ever increasing demands from the housing societies in the area of corpus fund and an additional carpet area free of cost and many more reasons which have attributed to almost hold-up or failure of redevelopment projects.

While numerous factors contribute to the hike in real estate prices, there is one significant factor, known as “Ready Reckoner Rates” that has a bigger part in deciding the movement of real estate prices. These rates are the prices of the residential property, land or commercial property for a given area and is published and regulated by the State Government. These rates are regularly revised on a yearly basis depending on the perception about the Government for such price revisions. Therefore, a homeowner or buyer would be required to pay the stamp duty or registration charges, not below such stated Ready Reckoner Rates or the actual price of the property, whichever is higher.

Adding to the misfortune of Developers, recently, the redevelopment industry has received one more hard-hit blow on their face from the State Government due to the recent rise in cost of TDR linked to Ready Recknor Rates known as premium FSI, a move which shall almost paralyse the Developers who have undertaken redevelopment projects and are at the beginning stage of buying process of premium FSI from the State Government.

As we are all aware, the TDR plays an important role in the suburbs of Mumbai as it is most vital component for the Developers redeveloping the properties in suburbs because it doubles the built-up area over and above the usual Floor Space Index (FSI) permitted on the plot. Developers currently have the mandated option of buying 33% of premium TDR from the State Government at a cheaper rate than what the private sellers charge and the rest of 67% from open market to cater the loading need of 1 TDR over and above the 1 FSI of plot potential. However, the new rates are bound to change the equations. The Developers are now going to find it increasingly unaffordable.

In principle, a hike in TDR rates will lead to a corresponding hike in prices for future redevelopment launches. However, owing to the current demand and absorption trends which are showing a slowdown due to erosion of buying sentiments on account of high consumer inflation and flat prices, this upward revision of TDR is expected the Developers to be away from launching new projects in suburban Mumbai.

When a Developer takes up a redevelopment project in the suburbs, he can use 1 FSI i.e. plot FSI and load an extra FSI of 1 by buying TDR from the market. In 2008, the State Government decided to sell 33% of this TDR on their count as premium FSI so that the Developer's mercy on private players reduces. The State Government till date used to sell premium FSI i.e. TDR at 30% of the Property Ready Reckoner Rates of 2008, has now decided to fix the new premium rate at 60% of the Ready Reckoner Rates of 2015 estimating fresh increase in annual flow of around Rs. 7000 crore through this sale.

The Developers have expressed their utter dissent that the new rates will sabotage all redevelopment projects and make them financially unfeasible as the stamp duty to be paid on new purchases of TDR FSI, shall also be now more costly burdening the buyers. The Developers alleged that the Government's move will benefit a group of private players who deal in this premium FSI i.e. TDR FSI. The increased rates will particularly affect redevelopment projects the prime suburbs of western zone where Ready Reckoner rates are very high.

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