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In a move that has been welcomed by the residents and developers, the Brihanmumbai Municipal Corporation (BMC) has decided, through the revised Development Control Regulations (DCR), to allow the redevelopment of 30-year-old buildings.
This special provision was necessary because unlike old and dilapidated MHADA buildings, there was no other rule in the DCR that permitted the redevelopment of buildings that were over 30 years old.
“The new rules will open up the doors for the redevelopment of over 35,000 old and dilapidated buildings in the suburbs,” says Mona Jalota, director – international and NRI, residential services, Colliers International India.
“As per the new rules, the BMC will offer 40 per cent of the total built-up area (BUA), as an incentive to the housing societies. A society can then use the proceeds from the sale of this incentive, to meet the construction cost of their own building. They will not charge any premium or extra cost for the same. This will only be applicable to buildings, which are more than 30 years old,” she explains.
Advantages of the regulation to allow redevelopment of buildings over 30 years
The BMC’s move, to offer 40 per cent of the total built-up area as an incentive, is likely to have appositive impact on Mumbai’s residential property market. Besides paving the way for structurally stronger buildings having better amenities, it will open up the development of non-buildable plots and thereby, create more open spaces and infrastructure. Anand Gandhi, director, acquisition, at Sugee Group, points out that the residents of old buildings, have been facing a lot of problems and they continue to live in small houses.
“Earlier, due to lack of profit, no developer wanted to take up redevelopment of such buildings. It was also expensive for cooperative societies, to undertake redevelopment on their own,” he says. Now, the residents of old and dilapidated buildings who were unable to afford redevelopment and buildings that had exhausted their FSI, stand to benefit, as these buildings can be redeveloped and the cost of construction can be recovered from the built-up area given to them.
According to a senior BMC official, the revised DCR rules, will benefit lakhs of residents in the city. “No developer was ready to take up the redevelopment of these buildings but now, societies can themselves go in for redevelopment,” he explained, requesting anonymity. Suresh Parekh, a resident of Ghatkopar, feels that the revised rule will particularly help suburban areas. “There are many buildings in the suburbs, which are on the verge of collapse and this move will help them,” he says. Moreover, buyers in the market are also likely to get more options, owing to supply generated due to the redevelopment of such buildings.
What is the need for redevelopment?
At present, the regulations make it obligatory on the part of every owner and occupier of buildings, which are in existence and in use for more than 30 years, to have them inspected through a qualified structural engineer registered with the Municipal Corporation of Greater Mumbai.
The said period of 30 years shall be from the date of (i) issue of its completion certificate by the corporation, or (ii) issue of permission to occupy a building under section 353A, or (iii) its physical occupation of at least 50 per cent of its built-up area, whichever is earlier.
Ramesh Prabhu, chairman of the Maharashtra Societies Welfare Associations (MSWA), points out that “Often, the problem is that housing society members do not think of the building as their own. This creates many issues related to maintenance and the building begins to deteriorate after 20-25 years. As a result, redevelopment becomes the need of the hour.” With redevelopment, the old structure is demolished and replaced with a new structure and new dimensions and space and the society need not bother about major repairs or maintenance, for the next 15 to 20 years.
Challenges in redevelopment of housing complexes
Experts point out that many of the housing societies in the city, when originally constructed, had consumed low FSI. With the government changing the FSI rules, now, developers and residents stand to gain. While developer earn by selling the additional flats, owners get better flats with more amenities. Nevertheless, redevelopment in group housing societies can be a complicated affair, as it requires the consent of 75% of the members.
Then, a redevelopment committee should be formed, which takes up the task of selecting a developer for redevelopment. This committee negotiates with the developer, to rebuild the complex and the developer is free to build excess units at market price. Advocate Vinod Sampat advises that “The process followed by the society members, should be transparent. Members should have legal and technical consultants to interact with the builder. The main task, is to check the builder’s background and financial condition.”