ENSURE STRUCTURAL AUDIT AND EXAMINE DOCUMENTS BEFORE REDEVELOPMENT

These are the most important steps before a property goes for redevelopment.     Before any property goes in for redevelopment, first and foremost, it should be put through a structural audit. Bylaw No 77 specifies that every society shall cause the 'structural audit' of the building/s as under:      For the building/s ageing 15 years to 30 years - once in every 5 years.      For the building/s ageing above 30 years - once in 3 years. This audit report will determine whether the building should go in for redevelopment or extensive repairs. Should a technical report be pending, it would be improper to pass a resolution in the general body meeting.      On the performance of a structural audit or survey of the building, the recommendations of the structural auditor should be placed before the committee and subsequently, before the general body to take appropriate steps in the matter.      Should the general body be of the opinion that the building requires reconstruction or redevelopment, then the consent of all the members must be obtained by the committee. This is the principal approval of all the members that they wish to have the existing building demolished and to reconstruct or redevelop the property on the same plot.      After the committee obtains the consent of members, it will need to examine their document and see if the conveyance of the plot has been done in favour of the secretary; whether the property card or 7/12 extract, 6/12 extract, mutation entries are in the name of the society. Also, if the plot falls in the Town Planning Scheme, one needs to check whether the Final Town Planning Scheme remark has been obtained from the MCGM.      It is important for the committee to first ensure whether conveyance has been done of the society and whether the builder/developer who has developed the building has made the conveyance in favour of the society. If not, then the working committee, in consultation with the redevelopment committee and other professionals who help regularise conveyance, should be called upon for assistance. Once the conveyance is done, the registered document should be sent to the collector's/tehsildar's office for making amendments in PR card 7/12 extract.      An examination of the documents will reveal the actual size of the plot. Once that is confirmed, the committee must verify whether the existing approved plan of the existing building is in conformity with that of the plot size mentioned in the property card or 7/12 extracts. If there are any discrepancies in the plot size, the committee must regularise the discrepancy by making an application to the collector's office of the region and do a survey of the plot, and after that rectify the PR card of 7/12 extract as per the latest survey report.      Once the plot size has been rectified, the redevelopment committee should call upon members and publish a public notice  in three local newspapers to make things transparent to members.      Terms and conditions set out by the general body for redevelopment should be adhered to by the redevelopment committee while entering into negotiations on behalf of the society.      It is imperative that the general body discusses all the matters at length and takes appropriate decisions by passing resolutions to the requisite effect in the general body meeting.      The resolutions passed in the general body meeting should decide the percentageFSI that the developer should pass on to existing members in addition to the existing carpet area that they are occupying free of cost.      It is pertinent to note whether the FSI the developer is planning to share includes free FSI like flower-bed area, dry balconies, niche areas etc., or will they be excluded. Issues like open car parking the developer may provide to the existing members should be discussed, examined and laid down in detail. These decisions should be passed by the general body unanimously.

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the possible repercussions of the spike in TDR prices

VIBHA SINGH analyses the possible repercussions of the spike in TDR prices, especially for the redevelopment segment

    The real estate market in Mumbai has been going through ups and downs since the past five years. However, the segment received a major jolt due to the recent spike in transfer of development right (TDR), a move which has been received by the suburban developers with great caution and even disappointment. TDR plays an important role, at least in the suburbs of Mumbai. Ram Raheja, director and head-design and architecture, S Raheja, says, "TDR is an important component for builders redeveloping suburban properties because it doubles the builtup area over and above the usual floor space index (FSI) permitted on the plot. Builders wanting to buy it from the market are now finding it increasingly unaffordable." 
    For long, the price base of TDR was in the range of Rs 2,250-2,500 per sq ft but suddenly, it has jumped to Rs 4,000 per sq ft. According to experts, there was effectively an increase every month. Shubhankar Mitra, head-strategic consulting (west), Jones Lang LaSalle India, informs, "The sudden rise in the TDR price from Rs 2,000 to Rs 4,000 per sq ft has caught the market unawares, despite the fact that a rise was likely, as not much TDR generation was taking place. TDR generation mostly comes via slum redevelopment or road widening projects. Effectively, TDR prices have now doubled; such a steep rise was not expected." 
    The TDR policy was launched in 1991 to decongest the island city. Owners whose plots were marked for spaces like playgrounds, etc., or whose land was needed for road-widening, could surrender it and get an equal amount of space in the suburbs. In the suburbs, TDR is generated when the developer/owner surrenders his land to the government and agrees to re-house slum dwellers or project-affected persons free of cost. In turn, he is issued a TDR certificate that gives him additional construction rights in the suburbs but only to the north of the plot he has surrendered. For instance, if a slum is redeveloped in a nonprime area like Mahul, the builder can utilise TDR in an upmarket area like Santacruz (west), which falls north of Mahul on the map. According to industry sources, developers have reaped a bounty ever since the concept of slum TDR was introduced by the state government in 1997. They have gone on a construction spree, especially in the congested western suburbs between Bandra and Goregaon. Rajesh Vardhan, MD, Vardhman Group, opines, "This sudden rise will hamper redevelopment projects in the suburbs, where the developers have already been appointed by various societies for redevelopment at older rates. The major reason for this impediment is the levy of open space deficiency by the BMC, which has been increased to 100 per cent of the premium as compared to 10 per cent of the premium earlier levied." 
    Mitra agrees to this point and explains that "Since the base FSI in the suburbs is only 1, it is a practice for developers to load about 60 per cent TDR in the project in order to take the FSI up to 2. Thus, the increase in TDR cost will also hike project costs. At present, when sales are slack and the developers are finding it difficult to sustain prices, the additional cost is going to squeeze margins even further." According to experts, the real estate sector is a critical one for any economy. It is the second largest employment generating sector after agriculture, and contributes about 5-6 per cent 
to India's GDP. Therefore, a rise in the TDR would make project costs higher, which in turn, would eventually lead to homes costing more. Investors will think twice before investing in real estate and the whole cyclical effect will have a negative impact on the economy. Raheja adds, "The new TDR has impacted the builders' community the most as those wanting to buy land from the market, are finding it exorbitant. We can predict that the hike in rates will only discourage redevelopment projects in general, and there would be a hike in apartment prices." 
    Ravi Ahuja, executive director, Cushman & Wakefield India, concurs that "An increase in prices of TDR will have a negative impact on developers as it will reduce profit margins in projects. Hence, these increases would be passed on to buyers, putting additional pressure on them and creating a negative impact on demand." 
    Raheja adds another dimension to this issue as he explains, "Right now, TDR rights are just with a few big firms. These companies can exercise control over the rest of the builders who need to buy land for their projects. This practice can be checked if there is an impartial committee that distributes the land at a fixed price rather than smaller companies being at the mercy of the bigger players. The transparency in the process of acquisition can help in price and quality control." However, Ahuja is quick to point out, "TDR is traded in the open market and prices are arrived upon based on supply-demand dynamics. It would be very difficult to control prices in the open market." He adds that "In principle, a hike in TDR rates will lead to a corresponding hike in prices for future launches. However, owing to the current demand and absorption trends, which are showing a slowdown due to erosion of sentiments on account of high consumer inflation and prices, this upward revision of TDR is expected to dither developers from launching new projects." The Maharashtra Chamber of Housing Industry (MCHI) recently urged the state government to increase its cap from 33 per cent to 67 per cent in order to further loosen the grip of private TDR suppliers. The government's TDR rate, which is based on the ready reckoner rate of an area, is currently available for Rs 1,500-2,500 per sq ft, which is 80-100 per cent cheaper than the market rate. Vardhan says, "Additionally, they should increase the premiumFSI from 0.33 to 0.67, which will make a huge amount available to the state government and BMC for improving Mumbai's infrastructure. They should also bring back the open space deficiency premium to the original level of 10 per cent." Mitra adds that "There has to be more emphasis on TDR generation through SRA 
schemes and other infrastructure projects. The BMC can also consider allowing more premiums FSI to be used as against TDR." 
    Experts caution that if some measures are not taken immediately, a further hike is going to affect the market negatively. "The substantial price hike will result in a slowdown in trading of TDRs for some time as the current residential markets are subdued in many pockets in Mumbai and developers are faced with liquidity issues. Hence, developers looking at launching new projects would be slow in acquiring TDRs at the new prices as they would have to be sure that the project costs and unit prices can absorb the increased costs," concludes Ahuja.

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‘Shivaji Park heritage decision aids bldrs’

Mumbai: Declaring structures and areas as heritage in Mumbai is like dressing up a malnourished child with gold ornaments, states a PIL filed in the Bombay high court.      Filed by activist Ketan Tirodkar, the PIL seeks a state CID probe into the "atrocious and arbitrary" policy decision to list buildings in Shivaji Park and parts of Mumbai as heritage structures. The petition alleged the conspiracy "under the guise of policy decision has been funded by some real estate developers whose towers in areas adjacent to the heritage areas shall fetch fortunes". The PIL has sought direction to the BMC to suspend its heritage list till completion of the probe.      The petition said 948 buildings on the declared list were built between 1930 and 1950 and the residents cannot bear redevelopment costs. Besides, developers do not see any redevelopment potential here as there is no FSI to match the market economics. "The structures may come down anytime as their architectures are unlike Mumbai University's or the HC's. The state, too, has not come up with any safety measures policy for these structures," it stated.      A division bench of Justice P V Hardas and Justice P N Deshmukh heard the petition and directed it be listed as a civil PIL. Locals don't want tag T he panel set up by the BMC to gather feedback on the new extended heritage list met 100 Shivaji Park locals, who objected to the area's tagging as a heritage structure. TNN

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FSI INCENTIVES ALSO OFFERED TO EXISTING PROPOSALS

GAJANAN KHERGAMKER outlines when FSI incentives are provided to buildings going in for redevelopment     Floor Space Index incentives are offered not only to fresh proposals but also to the existing proposals. Housing societies of landlords or occupiers may convert their earlier proposals in accordance with the modified regulations, provided the redevelopment scheme is in progress and has not been completed, i.e. where full occupation certificate is not granted.      However, this additional FSI is subject to the submission of a licensed structural engineer's certificate for structural stability, to the effect that the building is designed to take the additional load for constructing additional FSI if granted and certifying the feasibility for structural modifications, i.e. it should be feasible to convert the tenements earlier proposed with 180 sq ft carpet area into tenements of 225 sq ft carpet area.      The higher FSI does not automatically become permissible in cases where construction is already underway as per old plans, unless a provision was made in the plans, foundation, etc., for subsequently increasing the area of rooms or the number of floors, without endangering the structural stability of the buildings.      In order to streamline the cumbersome procedure for granting NOCs for redevelopment, the step of issue of letter of intent, prior to issue of NOC, has been completely eliminated by the government. It is no longer necessary to obtain a letter of intent. Now, the landlord or cooperative housing societies of landlords or occupiers can directly submit their proposal for redevelopment of their old cessed properties in A to G wards of Mumbai, as per the prescribed format, attached along with required documents and information.      After the board receives the complete proposal with documents, it will scrutinise it and an the NOC for redevelopment will be granted after the board is satisfied that all requirements are fulfilled by the applicant and approval has been given in the MBRRB meeting. A scrutiny fee of Rs 5,000 or whatever amount is fixed by the board from time to time will be charged for each proposal.      Once the documents have been received along with the application, and all legal and technical requirements have been completed, the NOC with be issued within three months. If the NOC holder fails to start the redevelopment work within 12 months from the date of issue of NOC, the board reserves the right to cancel the NOC.      Importantly, the NOC holder is expected to complete the construction of the new buildings for the rehabilitation of old occupiers within 30 months from the date of issue of NOC. Just in case he fails to do so, extension to the above time limit may be granted by the board, depending on the merits of the case, on the payment of an extension of fee of Rs 5,000 or an amount as decided by the board.      On granting of the NOC for redevelopment, the NOC holder is bound to carry out repairs to the old cessed buildings at his own risk and cost whenever such repairs are deemed to be necessary as decided by the repair board.      For the free sale buildings, occupation certificates will be given only after all the old occupants, including those who may be staying in the Repair Board's Transit Camps, have been rehoused in the newly reconstructed buildings.  QUICK  BYTES      IMPORTANTLY, THE NOC HOLDER IS EXPECTED TO COMPLETE THE CONSTRUCTION OF THE NEW BUILDINGS FOR THE REHABILITATION OF OLD OCCUPIERS WITHIN 30 MONTHS FROM THE DATE OF ISSUE OF NOC.      THE ADDITIONAL FSI IS SUBJECT TO THE SUBMISSION OF A LICENSED STRUCTURAL ENGINEER'S CERTIFICATE FOR STRUCTURAL STABILITY, TO THE EFFECT THAT THE BUILDING IS DESIGNED TO TAKE THE ADDITIONAL LOAD FOR CONSTRUCTING ADDITIONAL FSI, IF GRANTED.

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FSI of 5.33 okayed for Mantralaya revamp: Architect

Mumbai: A floor space index (FSI) of 5.33 was sanctioned for the Mantralaya redevelopment project right at the start, said architect Raja Aderi. 

    Aderi said the FSI was approved by the urban development department. "Besides, a part of the seventh floor was occupied earlier too, and we have not built more than what was existing earlier. The terrace is still there," said a public works department official. 
    Fire department officials said the building was occupied prior to the June 2012 fire, and had been refurbished, hence, the claim that offices were moving in without being issued occupation certificate is not correct.

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METRO AND MONORAIL: A BOON FOR PROPERTY MARKET IN MUMBAI SUBURBS

VIBHA SINGH explains how the metro and monorail projects are being envisaged as game-changers, in terms of connectivity between the eastern and western suburbs and thus, the realty markets here     PNagarajan, a resident of Andheri, is upbeat about both, the monorail and the metro project, even though the projects have been delayed. For many like him residing in the suburbs, these projects are going to make life much easier. According to property analysts, these projects are being envisaged as game-changers in terms of connectivity and will reduce both, traffic congestion and commuting time.      Once the metro and monorail projects are implemented, it will ease the traffic problems in the city and will come as a major relief for residents, especially those residing in the eastern suburbs, who spend half their time travelling to and from the railway station.      The Chembur-Wadala monorail section, which is India's first, is set to be operational in the coming months. The travel time between Wadala and Chembur will reduce by 21 minutes after the monorail is complete. The 19.54-kms monorail corridor is the world's second longest after Japan's Osaka corridor, which is 23.8 kms. Six rakes will be pressed into service for Phase I. Once they are operational, the trains will run every nine minutes between Wadala and Chembur.      There are seven stations in the first phase - Wadala, Bhakti Park, Mysore Colony, Bharat Petroleum, Fertiliser Township, VN Purav-RC Marg and Chembur. According to Manju Yagnik, vicechairperson, Nahar Group, "Today, the local trains are the lifeline of Mumbai. However, they are burdened too much due to huge traffic and passengers. The arrival of the metro and monorail is going to make life hassle-free for the residents. The Versova-Ghatkopar line of the metro rail, will provide a vital east-west link and will reduce travel time from 90 minutes to just 20 minutes. With India's first monorail route, the Chembur-Wadala route is expected to be operational soon. A huge amount of real estate development is likely to take place along this corridor."     Even Dilip Kawathkar, public relation officer, the MMRDA, shares similar views, as he says, "In the case of the metro project, which is going to connect Versova to Ghatkopar via Andheri in the first phase of the 11.4-kms elevated track, the connectivity between the eastern and western suburbs will provide much-needed relief to commuters. Currently, the journey on clogged roads is made tedious by the numerous traffic jams." Also, a consultant has been appointed to study the corridor of the Charkop-Bandra-Mankhurd metro, which is going to be constructed underground, instead of an elevated one and be extended to Dahisar.      Surendra Dewan, a property consultant in Chembur, explains, "If you are an investor, it makes sense to keep track of these plans and act in time, before property prices in areas that the project will connect rise. Locations that will gain from it are, Andheri, Ghatkopar, Chembur and Wadala, which have already seen a decent jump in property prices."      Talking about the metro project, Ashutosh Limaye, head-research and real estate intelligence service, Jones Lang LaSalle India, informs, "The first phase of the Ghatkopar-Versova link is supposed to become operational this year. In the eight years since the project was announced, prices in many areas that will benefit from the link have risen by as much as 400 per cent."      Expectedly, the monorail project has already driven up the real estate values. Property analysts anticipate that after the monorail gets operational, prices in these localities and in areas falling on the Chembur-Wadala stretch, such as Tilak Nagar, Kurla, Chunabhatti, JTB Nagar and Wadala Junction, will appreciate by a minimum of 20 per cent.      "We believe that both, the metro rail and monorail will have a great impact on the infrastructure development of the area. They will reduce traffic congestion and make the city smaller," states Shailesh Puranik, managing director, Puranik Builders Pvt Ltd.      "The government is also supporting the efforts with higher Floor Space Index (FSI), increasing the value of land parcels and built-up spaces. Prices in these locations have risen more than in others. The demand, too, is healthy," an official of the MMRDA says.      Kawathkar states, "The Mumbai transformation support unit has also come up with a suggestion to give higher FSI around the area of the upcoming metro stations. This should make those who wish to opt for redevelopment happy." He concludes, "With the monorail coming up from Chembur to Jacob Circle via Wadala, many residents have been approached by private developers, seeking redevelopment. The number is as high as 60. Residents must understand that their property value is most likely to jump substantially, once the metro or monorail run through their area."  QUICK  BYTES      BOTH THE METRO RAIL AND MONORAIL WILL HAVE A GREAT IMPACT ON INFRASTRUCTURE DEVELOPMENT OF THE AREA. THEY WILL REDUCE TRAFFIC CONGESTION AND MAKE THE CITY SMALLER.      IF YOU ARE AN INVESTOR, IT MAKES SENSE TO KEEP TRACK OF THESE PLANS AND ACT IN TIME, BEFORE PROPERTY PRICES IN AREAS THAT THE PROJECT WILL CONNECT RISE. LOCATIONS THAT WILL GAIN FROM IT FOR INSTANCE ARE, ANDHERI, GHATKOPAR, CHEMBUR AND WADALA.

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‘Bldg plan order hides more than it reveals’

Revised Ruling Holds Back Info That Could Give Away Illegalities, Point Out Activists

    After reading the fine print of state information commissioner Ratnakar Gaikwad's revised order on revealing building plans, activist-architects claim it is withholding key information that could reveal wrongdoing. 
    Gaikwad had ordered on September 29 all public authorities in the state from providing building plans under the Right to Information Act. Following a report in TOI, he revised the order, defining what could be provided under RTI (see box). 
    Instead of saying what can be provided, he should have listed what is prohibited, fumed architect, town planner and civic activist P K Das. "It would have made his intention clear. There is no mention of floor plans, which is more detailed. A key plan is only a summary and submitted for ease of computation. There is no mention of site and layout plans, fungible FSI, plans for mandatory open space reservations and areas free of FSI in the order." 
    The new order is absurd, said architect Nitin Killawala, who had obtained construction plans of Metro lines 1 and 2 under RTI and exposed shortcomings based on which a PIL has been filed. "It specifies information which is irrelevant while withholding interlinked plans and documents which make intentions obvious," he said. 
    Gaikwad said his revised order is very exhaustive. "Please read my order dated November 21 very carefully. Even internal detailing/interiors can be insisted upon, provided public interest is made out by the information-seeker," he said. 
    The building proposal department of BMC is not the only authority on whose scrutiny IOD/CC are issued, said Killawala. It's job is to assimilate NOCs and sanctions from a maze of authorities and civil departments such as fire brigade, collector, assessment, traffic, etc. "Every department scrutinizes plans and documents independently and approves the same in the utmost corrupt manner," he added. 
    A PIL being heard now claims the NOCs granted by the city fire brigade instead of protecting lives, endangers lives and property. Documents were obtained under RTI. 
    Killawala said the concession report, which summarizes all the approvals as well as various scrutiny fees, premiums, deposits, etc. taken by the government, is not on the list of information to be issued, according to the revised report. 
    The FSI statement in isolation is not significant. "FSI-free areas are an integral part of the calculation and shown in the plans and area diagrams. As such, most violations happen in approving such FSI-free spaces," Killawala said. The plans, kept out by the revised order, are very important documents. 
    "The violations exposed by activists based on documents obtained through RTI are so serious it forced the BMC to change the Development Control Rules in 2011. Gaikwad must withdraw the order,'' he said. COVER-UP BID UNDER THE SUNSHINE LAW 
SEPT 29 SIC ORDER 
    Building plans and other documents pertaining to public buildings will not be disclosed as this could be a security threat. The public buildings include government and semi-government offices, hotels, gymkhanas, hospitals, malls, IT buildings, commercial buildings, etc. 
    Interior plans of private buildings will not be provided under RTI unless proved that the information is sought in public interest 
    Directive applies to all municipal corporations and councils in the state 
NOV 21 REV. ORDER 
The revised order allowed access to: 
    FSI statement Coverage statement Key plan showing marginal distances Parking statement Key plan showing areas given free of FSI under balconies, staircase passages, etc Cross section of building 
    IOD/CC Occupation Certificate & all other relevant details (except internal layout of the rooms in the building & interiors and internal detailing in the building) 
WHAT'S MISSING FROM NEW ORDER 
Activist-architects say: 
    FSI-free areas Quantum of fungible FSI and its distribution Floor plans Site plans Layout plans Concession files 
    Approvals from various departments/ agencies 
BMC'S STIFLING DEMAND 
The civic body says complaints about unauthorized structures must be accompanied with documentary evidence. Without it, complaints won't be entertained. With the RTI restrictions, how are they supposed to get documentary evidence, ask activists

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Lodhas buy iconic London bldg for £300m

Mumbai: In one of the biggest real-estate deals this year, the Lodha Group has bought the iconic MacDonald House, a five-storey office-cum-home of the Canadian High Commission in London, for £300 million (around Rs 3,000 crore), giving it a toehold in the global real estate business. 

    It has a total floor area of 160,000 sq ft (gross internal area) and is built on a land area of 0.67 acres. Canada had bought the building from the US government in the 1960s. Lodha plans luxury homes on London plot 
Mumbai: The Lodha Group has bought the iconic Macdonald House in London. In February, the Canadian government had put on sale the palatial building, named after the country's first prime minister Sir John A MacDonald, to cash in on London's surging real estate market. 
    Industry sources said the deal was signed on Thursday after Lodha paid the entire bid amount, making it the group's first major property acquisition abroad. Four to five bidders from the Middle East and Asia were also in the fray for the property, whose reserve price was 250 million pounds. 
    International property consultants said the building is located off Grosvenor Square in Mayfair, one of the most desirable areas in London and prices here can reach up to 2,000 pounds a sq ft. "Lodha is planning to construct a highend luxury residential building here. The construction, however, will not start till next year as London planning authorities have not changed the use from commercial to residential,'' said consultants close to Lodha Group. 
    Abhishek Lodha, managing director of Lodha Group, did not respond to queries seeking comment while the Canadian Embassy could not be contacted. 
    Incidentally, this is the second property owned by a foreign government purchased by the Lodha Group. Last December, it bought Washington House, staff quarters of the US consulate on Altamount road in Mumbai, for Rs 342 crore.
    Lodha's MacDonald House buy comes three years after Sahara India Pariwar in 2010 acquired the iconic Grosvenor House hotel in London for 470 million pounds. Sahara has put the hotel back on the block.

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IS MUMBAI A BUYER’S MARKET?

This is a question which has been asked way too often in the context of Mumbai's real estate market. RAVI SINHA analyses whether one of the most expensive markets in the world, has finally turned into a buyer's market     Mumbai's real estate segment has historically been red hot, something that is the aspiration of millions. The island city with less supply and more demand and the ever increasing migration, only meant that even if the market deviated from the conventional wisdom of economics in demand and supply dynamics, it still would be a sellers' market. The price index, demand-supply gap, inventory and all other indicators collectively lent credence to this school of thought. Moreover, the island city's realty continued to command the best premium, not just among the other metro cities of India but also in global ones.      However, today, there are strong indications of the city becoming a buyers' market. The question on everyone's mind is: what changed? Analysts believe that it is the over reliance of raw statistics that is misleading the outlook for Mumbai's property market. Fundamentally, there is nothing wrong with the segment; it is just the fact that the change of business strategy borne out of the global economic slowdown is changing the way the realty market has been operating in the city. This change is actually making Mumbai's real estate a more matured market.      To a large extent, the property segment seems to be tilted in favour of buyers. However, in reality, it is an equal opportunity market for both, the buyers and the sellers. Plain statistics reveal that the market has a ready inventory of 48 months; however, statistics never reveal the reason behind this inventory pile up. To say that affordability is an issue may be true but that has been the reality of the Mumbai market for ages now. After all, the city has the highest per capita income as well.      The answer lies in the fact that while the developers have entered into a joint-development model with the land owners, the focus is more on the execution rather than spending resources on the principal component of land and then waiting for the projects to start. Moreover, there are lesser new launches in recent times. This too highlights the fact that more importance is being given to the execution rather than the launch of new projects. Of course, the slowdown in the economy in general is making the sentiments bearish but that is also what is creating a very realistic market for the buyers as of now. Property seekers in the island city realise that the moment the macro-economic outlook is bullish, the prices that have hovered around the same level for almost a year now, will hit the sky once again. That answers the home buyers' query of whether it is the right time to buy a property in Mumbai.      Diipesh Bhagtani, executive director, Jaycee Homes, agrees that a lot has changed in the Mumbai realty segment and there have been a lot of changes in the government policies as well. New DCR rules have come up, a regulatory body is being established, FSI in south Mumbai for redevelopment of dilapidated buildings has gone up, the buying power has gone down and so on. Inflation too, has played a major role in the purchase decisions of high value commodities. Real estate, being one of them, has also been slow moving this year. "The prices have stabilised this year. There are a lot of value add-ons being offered by the developers according to their marketing strategies. All this is expected to change by 2014, with more clarity coming in from the government. I feel this is the right time to invest in a property, as the scenario will improve by next year," says Bhagtani.      According to a Cushman & Wakefield report on demand outstripping supply, Mumbai is expected to see the least imbalance in demand and supply, with the former outstripping the latter only by 5 per cent. The report elaborates that Mumbai is expected to witness an additional demand of approximately 2,25,000 units for the mid and high-end segment in the next 5 years, while the supply in these categories will be nearly 214,000 units. Of the total demand in these two segments, a majority will be seen in the mid-range housing segment, which will remain under-serviced. Overall though, Mumbai is expected to see large supply in 2014 and 2015, most of which will be in the high income group (HIG) category. The price points at which middle income group (MIG) projects have been launched are also higher than what end-users of MIG would like to pay.      Agreeing that property in Mumbai is increasingly turning in favour of the buyers, Manju Yagnik, vicechairperson of Nahar Group, says that the overall economic slowdown, higher interest rates on home loans, etc., are a few reasons that are restraining home buyers from taking the final decision these days. However, it should be considered as a temporary phenomenon. "We are sure that the Reserve Bank of India (RBI) and the government would take positive measures to bring optimism into the market in the days ahead. There is a lot of inventory with the developers, which they will open up. Buyers should avail this opportunity to strike a good deal. Once they have identified the property based on the amenities and infrastructure, they should undertake a market study of the location/area and then negotiate with the developer to get a good price. There cannot be a fixed method for negotiations as it will depend on the demand and supply in that particular area. Buyers today are aware about the markets as well as their needs; therefore, they would not fall for flattering offers and discounts but analyse in-depth before taking a decision," adds Yagnik.      Some call it a buyers' market while others prefer to call it an equal opportunity market; however, the fact remains that the macroeconomic indicators, coupled with the softening of the Mumbai property market, makes it an ideal time for buyers to invest in this segment. Analysts are unanimous that with the projected demand outstripping the supply, it may soon turn out to be red hot and the wishful thoughts of a substantial price correction in the city will then remain just that - a wish. Also, the festive spirit has led to many developers going the extra mile with offers, freebies and incentives. Collectively, this makes it the best time to invest in the Mumbai property market.      (The writer is CEO,      Track2Realty)

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HC refuses to stall demolition for Kurla road-widening

Mumbai: Traffic jams are the rule of the day, the Bombay high court observed on Friday, refusing to grant relief against the demolition of illegal structures on the 

road at Kajupada Pipeline, Kurla, which are coming in the way of road-widening. 
    The Kajupada Traders Welfare Association moved a bench headed by Justice S C Dharmadhikari "requesting breathing time'', saying the Brihanmumbai Municipal Corporation, without issuing a notice, had reached the spot for a demolition. 
    The high court had on September 30 disposed of their plea, recording BMC's undertaking that fully affected structures of eligible occupants will be given alternative accommodation and those partly hit will be locally accommodated or compensated. 
    Their advocate, Pradeep Thorat, said, "The bulldozers have arrived.'' He expressed apprehension that they will demolish structures more than needed for road-widening. 
    The judges refused to grant relief. "Public interest is at stake. The public want proper roads. How are we to balance this?'' asked Dharmadhikari. 
    BMC's advocate Trupti Puranik said they were demolishing structures partly hit and details were on the civic body's website a month before.

MAKING WAY: The road at Kajupada Pipeline, Kurla, which the BMC wants to widen

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Fresh policy set to boost cluster redevpt, extend it across Mumbai Govt Plans Incentives, May Help Acquire Land

Cluster redevelopment is set to get a boost with a new policy offering more benefits to both developers and residents and making projects more attractive than standalone redevelopment.      For instance, the bigger a cluster undergoing redevelopment, the larger will be the flats of individual owners. Moreover, it will be easier for housing societies to band together and negotiate with a developer. Now, a developer buys out properties piecemeal and then takes up cluster redevelopment.      "While the minimum area will remain one acre, the larger the area taken up, the bigger will be the flats that residents can look forward to. The minimum size of a flat will be 300 sq feet," said a source.      The proposed policy that will replace the existing cluster redevelopment policy under Development Control Rules 33(9) is likely to apply across Mumbai and not just south Mumbai that has a large number of old and dilapidated buildings, added sources.      The BMC will mark the one acre areas that can form a cluster. Several suchclusters can then come together for a mega-cluster redevelopment. "Unlike the old policy, the focus this time is on land-pooling. The government plans incentives to ensure more societies come together for redevelopment. If there is some hurdle, it will help with land acquisition," said the source.      Along with basic size, the government may also define the incentives to be provided to mega clusters to avoid disputes and litigation.      A committee including the civic and MMRDA commissioners and the Slum Rehabilitation Authority chief and led by urban development principal secretary Manu Kumar Srivastava is reworking the policy. It has held consultations with the Property Owners Association and the Maharashtra Chamber of Housing Industry.      The sources said the urban renewal scheme is likely to comprise three levels of planning: macro (broad zoning of land and arterial roads), meso (the BMC's development plan that identifies land use) and micro (for every cluster). The three will fit in, allowing the authorities control over how the city develops.      Developers who have started cluster redevelopment will have the option to migrate to the new policy.      The move comes as the 2009 cluster redevelopment policy failed to deliver. The ambitious Rs 5,000-crore Bhendi Bazaar project of the Saifee Burhani Upliftment Trust spread over 14.5 acres is going very slowly. So far, only five proposals have been approved and one at Parel implemented.  BIGGER FLATS, BETTER CITY PLANNING  OLD POLICY NEW POLICY  Minimum area one acre Minimum area one acre  Developer obtains consent from residents, purchases properties and seeks BMC permission for cluster redevelopment BMC may get to draw boundaries ofclusters. Resident groups can come together to negotiate with builder for redevelopment Residents of various clusters can group together to form a megacluster  Minimum flat size 300 sq feet. Larger flats at discretion of developer Minimum flat size 300 sq feet, but for mega clusters govt plans to offer larger flats Acquisition to be done by developer Govt to lay out options, including acquisition by the state to push redevelopment  No urban renewal scheme master plan. BMC has no control on city's overall development Three-tier urban renewal scheme — a master plan, a development plan and a plan for every cluster. All redevelopment to be in sync with master plan. BMC to have control on overall development of city      Does not ensure enough public amenities. Skewed development      Proposes planned development of the city

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Mhada ‘gifts’ newly repaired society to builder for redevpt Gives Up 600 Flats, Deal Under A Cloud

Mumbai:For a nominal premium of Rs 165 crore, Mhada, the state agency entrusted with providing affordable housing, has allowed a builder to redevelop a Worli housing society with a development potential of around Rs 2,000 crore. The buildings were repaired and painted three years ago, but the Maharashtra housing and area development authority still declared them dilapidated so that the project could be pushed through to procure a much higher FSI since the plot falls underthe coastal regulation zone (CRZ II). 

    Mhada's role in the Shivshahi cooperative housing society case raises questions about whose interests the housing authority has at heart: economically weaker flat-buyers or influential developers. In 2010, Shivshahi CHS, comprising 192 flats in 12 buildings, awarded the redevelopment rights to Wonder Value Realty, a joint venture floated by HBS Realtors and IL&FS. FSI from five societies' shared area given to bldr 
    Earlier that year, a Mhada policy had scrapped the premium option and instead made it mandatory for it to receive a proportionate share in the built-up area from the builder when such properties are redeveloped. But the housing authority did not insist on its share: at least 600 new tenements for economically weaker sections (EWS) in a prime area like Worli. "This has caused a huge loss to Mhada, whose basic principle is to create housing stock for the common man,'' said sources. 
    Responding to TOI's query as to why it let go of its share, Mhada CEO Satish Gavai said, "Your information is maliciously incorrect on fact and law.'' 
    R B Mitkar, Mhada's resident executive engineer, said the builder's proposal was received on August 18, 2010, just before the new policy stipulating sharing of built-up area came into force. "The Mumbai board approved the proposal as per the earlier premium policy,'' he said. 
    Yet, documents including official file notings made available to TOI show that the proposal was submitted to Mhada on December 23, 2010—several months after the revised policy was introduced. In fact, on the same day Shivshahi society wrote to the chief officer, Mumbai board, proposing to redevelop the property under development control regulation 33 (5). 
    Also, the modified CRZ notification of Jan 2011 stipulates only buildings declared dilapidated are eligible for 2.5 FSI for redevelopment in CRZ areas. All other redevelopment projects for Mhada colonies in CRZ II are entitled to 1.59 FSI. 
    In an email reply, Kayvanna Shah, CEO of Wondervalue Realty, said, "There is no provision in law where Mhada can unilaterally decide to become a developer of an ownership society without their express consent. Therefore, there is no question of Mhada generating 600 EWS flats from the society.'' Asked why the buildings were declared dilapidated despite being repaired recently, Shah said, "Dilapidation is an existing established state of the building. But they had to be repaired partially to be made habitable, for the safety of the existing members of the society since prevention is better than cure.'' 
    The three-acre land on which the Shivshahi society stands, was leased to Mhada by the municipal corporation for 999 years for building EWS tenements for industrial workers. The buildings came up in 1950. 
    Shivshahi is just one of the five societies in the 34,000 sq m (8.5 acres) Mhada layout. Shivshahi occupies about 12,325 sq m (3 acres). Sources said open spaces and recreation ground belong to all the five societies. Yet, the FSI generated from the common areas was parcelled off to the developer by Mhada. "This extra FSI belongs to all societies within the Mhada layout and not just Shivshahi,'' they said.TOIhas learned that as a result, the construction permission is a phenomenal 9.57 times the plot area. Residents decided to go in for redevelopment by inviting tenders from builders in April 2004. Since then, it is alleged, several state politicians were interested in this property because of its prime location.

Shivshahi CHS At Worli

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‘Disturbed’ SC puts off razing of illegal Worli flats till May 31 AG Offers Plan To Resettle Residents In New Bldg At Site

New Delhi: Disturbed by media reports on the suffering of residents of illegal flats in Worli's Campa Cola society, the Suprem Court on Wednesday suo 

motu stayed their demolition till May 31 next year. 
    It came as huge relief for the residents, who faced a more strident BMC and police on Wednesday morning. There was a lathicharge, a gate was torn down and residents were being pushed out when news of the SC ruling came, triggering tears of joy and celebrations. 
    The order by a bench of Justices G S Singhvi and V Gopala Gowda gives more time to the residents to find alternative accommodation. But attorney general G E Vahanvati pointed out that postponement of the demolition would not solve a "human problem". Ruling out an ordinance to overturn the demolition order, he said, "What is illegal... must go. But I have had consultations with the BMC and a rough proposal has emerged to solve the problem." 
    Extra FSI is available at the site and it should be used for a building in the compound for the illegal residents. This would be "alternative accommodation for those whose flats would be demolished". "This will solve the problem," he said. The SC found the proposal "justifiable" and requested the AG to file it by November 19. "If the residents agree, we can consider it. We will fix a time limit for the BMC to sanction the plan." 
SOLUTION IN SIGHT FOR CAMPA COLA? 
AG Vahanvati proposes a new building in the same compound to resettle owners of illegal flats 
Huge unutilized FSI as well as additional FSI available. It could go to the proposed society It will have excess flats even after resettlement. They can be sold to raise construction cost 
After resettlement, illegal structures can be demolished. SC wants written plan on Nov 19 JUST IN TIME The residents faced a strident BMC and police on Wednesday. There was a lathicharge at protesters, bulldozers brought down the gates of BY Apartments and police began throwing out the illegal residents when the SC ruling came SC had no idea that most Campa flats were occupied 
    Apart from being a legal issue, it is a human problem, Justice Singhvi said, sharing the AG's anguish. The judge said, "We can't even share how badly we were disturbed by last evening's developments. I slept thinking about it around 11.30pm. It was a disturbed sleep. I woke up at 3.30am and could not sleep thereafter." 
    The court explained it had passed the demolition order (with November 11 as the deadline for the residents to vacate their homes) after being told by the counsel that 75% of the illegal flats' occupants had left the premises. "It appears that mosthave not vacated. Some are adam a n t wh i l e most have not found alternative accommodation," the bench said. It appreciated the assistance rendered by senior advocates Fail S Nariman, Mukul Rohatgi and Pallav Shishodia and posted the matter of the BMC's alternative accommodation proposal for November 19. 
    The court on February 27 had ordered the demolition of 96 illegal flats in the Campa Cola compound. After making unsuccessful attempts to save their homes, the residents had approached the Supreme Court, disputing the total area proposed to be demolished. 
    The court in an order on October 1 termed the plea "clearly impermissible because no such plea was raised at any stage of the earlier proceedings" and said that "by creating an artificial dispute, the petitioner cannot frustrate implementation of the notices issued by the BMC". 
    In the same order, the court recorded, "At this stage, senior advocate Mukul Rohatgi gave out that 75% of members… have vacated the illegally constructed portions of the (Campa) buildings and then made a request that the remaining members be allowed a further four weeks to vacate the premises in their occupation." 
    After Vahanvati said he had no objection to the grant of the period, the bench, headed by Justice Singhvi, said (on October 1), "Keeping in view the forthcoming Dussehra and Diwali festivals, we deem it proper to accept the prayers made by Rohatgi and allow time to the members of the building societies up to November 11, 2013, to vacate the premises in their occupation. 
    "This would be subject to the condition that they shall not file any litigation in any court in the state of Maharashtra, including the Bombay high court, except for recovery of the amount paid to the developers/builders." 
AG'S REHAB PLAN 
    The attorney general's plan for alternative accommodation for illegal Campa residents on the same compound makes use of the fact that the present-day development control regulations provide for adequate FSI for a new building in the compound 
    During the hearing of the case earlier, the residents' advocate had sought regularization of the illegal area under the 1991 DCR through the levy of a penalty. The BMC rejected the option 
    The SC in its February order upheld the civic body's stand, saying the building plans had been sanctioned before the new DCR came into effect and the permissible FSI under the old rules had been exhausted

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90% of bldgs inspected in suburbs flouted fire norms Fire Brigade To Set Up Cell To Enforce Safety Rules

Suburban buildings are face a greater risk from fire, according to data from a fire brigade audit of residential and commercial buildings in the city this year. 

    Inspections conducted by the fire brigade in the island city and the suburbs, between April to September, found that most buildings surveyed in the western and eastern suburbs violated the safety norms. 
    Of the 1,397 buildings inspected in the western and eastern suburbs, notices were issued to 1,216 buildings for violation of fire safety norms. But even after being warned to take corrective measures, only 70 of these buildings filed compliance reports with the fire brigade. 
    Similarly, of the 2,346 buildings inspected in the island city, 605 were issued notices of which only four buildings complied with the directives. 
    The buildings inspected were high-rises, high-footfall areas like malls, multiplexes, industrial estates and government buildings. 
    The inspections were conducted randomly under the Maharashtra Fire and Life Safety Measures Act (2006), which makes it compulsory for buildings over seven-storeys tall, as well as public spaces like malls and multiplexes, to undertake fire safety compliance measures twice a year and submit reports to the fire brigade. The Act stipulates that every building more than seven storeys tall should have an internal fire-fighting system and sprinklers, and a clearly marked refuge area which should not be encroached. 
    Fire brigade officials said that residential societies take fire safety measures very lightly and wake up only when there is a fire raging in their buildings. 
    The fire brigade also plans to set up a special cell by mid-2014, to conduct inspections and implement the Fire Safety Act. 
    Currently, firemen are saddled with the task of undertaking inspections in their areas and issuing notices, in addition to attending rescue calls. The new cell, said officials, will help implement the norms more effectively and encourage frequent checks. 
MOST COMMONLY OBSERVED VIOLATIONS Cluttered lobbies and passages Fire-fighting apparatus are nonfunctional as they are not serviced Fire-fighting apparatus not connected to a water tank 
NORMS FOR HIGH-RISES & HIGH-FOOTFALL AREAS 
The Maharashtra Fire Prevention and Life Safety Rules, 2009, framed under the Maharashtra Fire Prevention and Life Safety Act, 2006, puts the onus of maintaining and documenting fire safety installations in a building on the owner/occupier 
    Smoke alarms should be installed and maintained. Batteries in smoke alarms should be replaced at least once or twice a year, the entire unit after 10 years 
    Display a detailed map of the premises, entry and exist routes, refuge space and electricity box. The holding spaces, staircases and open spaces should be kept free
    Each flat in a highrise must have a functional fire extinguisher and each adult in a family mus know to operate it 
    Buildings should get a regular fire inspection done in every six months 
    Fire brigade can disconnect electricity and water connections of buildings which default in implementing fire safety norms 
PENALTIES 
Penalty for defaulters under this Act is between 
30,000 to 1 lakh 
Failure to adhere to fire safety norms will become a non-cognizable offence and offenders can be jailed for six months to three years 
However, defaulters are penalized only after three notices are issued and if they still fail to comply

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50% of buildings cleared for construction lack OC

Mumbai: Almost one out of two buildings cleared to come up in the city does not have an occupation certificate (OC). 

    Latest data accessed by activist Anil Galgali using the right to information (RTI) Act shows that in the last nine years 13,313 proposals were cleared but OCs were issued for merely 6,888 buildings. 
    An OC is a document issued by the municipal corporation to a builder after the completion of a building to certify that the construction is in compliance with the approved drawings of the plan and that building codes and laws have been followed. 
    Data accessed through the RTI query revealed that from 2003-04 to 2012-13, 14,370 proposals were received. Of these, 9,841 got an IOD (intimation of disapproval), another 13,313 were granted a CC (commencement certificate), 6,888 received an OC and 128 were issued a BCC (building completion certificate). 
    "On an average, merely 51% of the buildings that were cleared to come up in the city received an occupation certificate," Galgali said. "Such data must be put up online, as gullible citizens are taken for a ride by builders." 
    He said he had demanded that the BMC put out these details every three months. 
    Galgali claimed that BMC officials were in a hurry to issue CCs and IODs, but when the time comes to issue OCs officials often do not work according to the law.

In the last nine years, 13,313 proposals were cleared, but OCs were issued for only 6,888 buildings

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TDR rate shoots up, hits redevpt projects

Mumbai: A sudden spike in transfer of development rights (TDR) rates from Rs 2,500 a sq ft to over Rs 4,000 in the past two months has jeopardised redevelopment projects in the suburbs.      The phenomenal increase, attributed to a few players who control the roughly Rs 2,000-crore-ayear TDR market, has forced many builders to renegotiate deals with housing societies or put them on the backburner. TDR is an important component for builders redeveloping suburban properties because it doubles the built-up area over and above the usual FSI permitted on the plot. But builders wanting to buy it from the market are now finding it increasingly unaffordable. TDR stocks low, rates may go up to 5,000 per sq ft  Mumbai: The skyrocketing transfer of development rights (TDR) rate is likely to go up further from the current Rs 4,000 asq ft rate.      "The rate may jump to Rs 5,000 a sq ft in the next one month because no TDR is being generated from slum projects," said an industry source.      "Since the last three months, every week has seen an increase in TDR prices. This has made redevelopment of societies unaffordable and unviable," said Nayan Shah of Mayfair Housing.      He added that if TDR rates continued to escalate and the state government failed to intervene, redevelopment projects will come to a grinding halt and apartment prices will increase.      Sources said the total stock of TDR is currently barely 10 lakh sq ft against the annual demand of about 70 lakh sq ft. Most of the stock is held by just two builders, D B Realty and RNA. These two construction firms are some of the biggest slum redevelopers in the city who generate TDR by building tenements for slum dwellers or project-affected persons free of cost. As compensation, they receive additional construction rights in the form of TDR. They can either use this TDR themselves to build anywhere north of the slum plot or sell it to another developer.      Hiren Patel of Atithi Builders and Constructors said his slum redevelopment project in Mahul will generate over one crore sq ft of TDR. However, Hindustan Petroleum Corporation Ltd (HPCL) has objected because the project is close to its refinery.      Two years ago, the state issued an ordinance to break the monopoly of the handful of builders and traders who control the TDR market in Mumbai. To discourage cartelisation, it ruled that developers could now buy 33% of the required TDR from the government at a much cheaper rate than available in the open market. It is the remaining 67% controlled by a few at a phenomenal cost that is causing heartburn in the construction industry.      The Maharashtra Chamber of Housing Industry (MCHI) recently urged the state government to increase its cap from 33% to 67% to further loosen the grip of private TDR suppliers. The government's TDR rate, which is fixed on the ready reckoner rate of an area, is currently available for between Rs 1,500 to Rs 2,500 a sq ft, which is 80% to over 100% cheaper than the market rate.  WHAT IS TDR? T he transfer of development rights (TDR) policy was launched in 1991 to decongest the island city. Owners whose plots were marked for playgrounds etc or whose land was needed for road-widening, could surrender it and get an equal amount of space in the suburbs. Slum TDR was introduced in 1997. Builders redeveloping slums for free receive slum TDR, which can be used north of the scheme. For instance, if a slum is edeveloped in a non-prime area like Trombay, the builder can utilise the TDR in upmarket Bandra (west), which falls north of Trombay on the map.      WHAT IS FSI? F SI refers to the buildable area on a plot of land. An FSI of 1means the area of construction should be equal to the area of the plot. For example, a plot of 10,000 sq ft can only have a built-up area of 10,000 sq ft and no more. FSI for Mumbai suburbs is 1, but another 1 FSI can be loaded by buy

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