Mumbai:

Glass fa�ade is the new �in� look for the architectural landscape of Mumbai but may spell doom for its environment and safety, warn scientists from the National Environmental Engineering Research Institute (NEERI). Researchers who set out to study the environmental impact of such structures found that temperatures at one glass fa�ade building peaked as high as 17 degrees Celsius more than its surrounding areas.

The findings raise pertinent questions about urban development at a time when Mumbai is undergoing a mirrored makeover. Corporate offices, malls, hotels and even the landmark Churchgate railway station are shunning concrete structures for snazzy glass facades. While environmentalists say the rampant use of glass is unsafe for Mumbai�s congested streets and inconducive to its hot and muggy climes, architects and planners believe glass represents GenNext of construction and has positives if used properly. The jury is still out.

NEERI scientists used hightech IR thermographic cameras to record temperatures around glass buildings in Nariman Point, Worli-Parel and BKC. �At one point, when the ambient temperature was 25.5 degrees Celsius, we found that the temperature near the glass structure went up to as high as 42.4 degrees. This could be because of the heating effect caused by the use of glass,� said NEERI head Dr Rakesh Kumar.

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�Glass still a nascent concept in India�

Mumbai: Revealing the preliminary findings of the study on the environmental effect of glass buildings, NEERI head Dr Rakesh Kumar said the heat island effect could be more aggravated as one moves off the ground towards higher floors. �Sensitivity to weather should be one of the pre-conditions for building designs but is seemingly disregarded in Mumbai. The high reflectance of glass structures further raises temperatures in surrounding areas,� he explained, pointing out that glass facades were originally designed for cooler countries as they trapped heat within the building as well as radiated it outside. He however, pointed out that their findings showed that temperatures fluctuatations varied depending on the type of glass used and how it was used, and NEERI will thus study 30 more different glass structures before forwarding its findings to planning agencies.

While making his point that no material was bad if used properly, environmental architect Sandeep Goswami of Fountainhead II attributed the widespread and unmonitored use of glass-facaded buildings in Mumbai to the tendency of developers to blindly ape the West. �Many such structures create an oven effect indoors and require more power for airconditioning. Also, the glass is more likely to shatter due to the hot environs. Given that our buildings are so closely packed, this increases the risk of accidents to passersby and pedestrians,� he warned. The state highrise committee had recommended a distance of 20 metres between skyscrapers, but buildings in Mumbai are cheek-by-jowl. The increased fire hazard and risk of bird hits are other concerns that dog environmentalists.

But architects and planners believe glass facades draw sharp criticism only because the concept is still nascent in India. They point out that there are many forms of glass material and skilled usage could prove its benefits. Architect Hafeez Contractor warned against blanket perceptions. Saying glass facades have their pros and cons, he believes the positives far outweigh the negatives. �Glass requires lesser space and places lesser load on a structure than concrete bricks. Glass structures have lower maintenance costs and are less labour intensive for installation too,� he said. He believes the proper use of louvres for ventilation could mitigate heat effects, as well.

Saying that glass facades had emerged as the popular choice mainly for their aesthetics, Subhash Patil of the Institution of Engineers however, believes the city needs more �scientific study to quantify the ill effects of increasing use of glass fa�ade�. He said professional bodies like theirs could then deliberate with stakeholders on the issue

New Bldg Approvals Will Cut Corruption

Building permission rules in Mumbai gave huge discretionary powers to authorities, which were m i s u s e d . The amended development control rules (DCR) will put an end to this. Areas which were not included in the building�s floor space index (FSI) were given to different developers differently, spanning a huge industry of corruption. The bribe amount does not go from the developer�s pocket. He recovers it from the flat purchaser. Ultimately, the burden falls on the citizen. There was an even bigger problem. Free of FSI areas like flower beds, voids, ducts, lobbies, etc were sold by builders and covered into living areas. Thus, although the manipulation was done by the developer, the flat buyer was held guilty of violating the law. Action was taken against him and he was also open to blackmail by unscrupulous elements in society or even by BMC staff.

Many buyers did not know what was legally permissible and what was illegal to cover in their homes. Hence, they became liable for action. Now, under the new rules, the buyer will receive everything legally permissible only and there will be no danger of blackmail or action from the BMC staff. Mumbai is terribly short of living space. People, by and large, need more area than what they have. New rules allow 35% more area in which number of rooms or room size can be increased, instead of flower beds, voids, lofts etc, in which one cannot live. Some people argued that this 35% extra be used only to build flower beds, niches, elevational features and not to provide additional or bigger rooms. I did not agree with this. The choice should be with the flat purchaser. Those who want additional room or bigger rooms should have that legally and those who want balcony or flower bed or voids or other elevational features, can have that too. New rules permit both choices and life will be easy for the common man.

Earlier, loft size in a room or kitchen was restricted to 25% of the area. If anybody made a bigger loft, action was taken as it was deemed illegal. Now, all restrictions are removed and people can put the loft in their house to the extent they like. Reconstruction of cessed buildings in the island city will greatly benefit by these rules. Tenants were eligible to get a minimum carpet area of 300 sq ft in the redeveloped building. Now, in addition, they can received an additional 105 sq ft area for which FSI will be granted free of cost to the developer. The developer, at the most, will have to incur construction cost for this additional area. Redevelopment of cessed buildings will also be easier because most plots are under 600 sq m in size. Thus, the side margins on all sides of such reconstructed buildings have been reduced to 1.5 m. This will facilitate early redevelopment of cessed buildings. The 35% additional FSI on rehab buildings is also allowed free of premium in the suburbs. It will help existing tenants/society members to receive higher area on redevelopment.

From now on, all developers will receive equal treatment. It will not only eliminate corruption, but will speed up building approval procedures. Land prices will also come down, which have been artificially kept high due to too much money being offered by some developers, who were able to get very high free of FSI areas by manipulating the system. This will stop. Land deals area already being negotiated at lesser prices now. The benefit will ultimately reflect in lower real estate prices in the future.

MUMBAI:

Even as the residential market continues to face gloomy times, the commercial office space segment has witnessed the biggest lease rental deal ever-in terms of size-in the city. The rates, though, are still less than last year's.

The Uttar Pradesh-based Sahara Group, through a lease agreement, last week picked up 3.5 lakh sq ft on the top six floors of Crescenzo, a 20-storey building constructed by Parinee Developers in Bandra Kurla Complex (BKC). At a rental of Rs 220 per sq ft a month, the annual lease rent effectively works out to Rs 75 crore.

Industry experts say lease rental in the same building a year ago commanded Rs 250- 275 a sq ft. "A reason for the discount could be the size and tenure of the deal. The agreement is for nine years with a rental reset clause after every three years. This is the largest and first commercial lease transaction, in terms of space, entered into by a single lessee this year in BKC," said an expert.

A Parinee Developers spokesperson confirmed the deal, but refused to comment on the rentals. Incidentally, Parinee Developers was a co-owner of the Indian Premier League team Kochi Tuskers Kerala. The franchise was later terminated.

Cresenzo stands on a 2.2-acre plot that Parinee acquired from the MMRDA on an 80-year lease in July 2006 for Rs 536 crore.

In 2008, the builder executed a major deal by selling 3.5 lakh sq ft to Standard Chartered for Rs 800 crore.

According to Kaustav Roy, executive director of global property consultants Cushman and Wakefield, the deal will mean firming up of lease rental rates as the supply for almost ready-to-occupy premises in BKC has reduced. "Unlike a year ago, the supply of such ready-to-occupy premises is now approximately 12 lakh sq ft. This is available in The Capital (around 5 lakh sq ft) constructed by Wadhwa Developers, TCG (2 lakh sq ft) and FIFC tower (about 7 lakh sq ft) . The limited supply will result in lease rental rates firming up," said Roy. Rentals are currently pegged at approximately Rs 300 per sq ft.

According to a recent report by global property consultants CBRE, BKC continues to witness an increase in occupier interest, with absorption of 0.18 million sq ft of Grade A office space in the fourth quarter of 2011. "Sustained occupier interest and negligible supply addition have led to a marginal rental increment of 2-3% this quarter. Vacancy has declined from 11-12% in the previous quarter to approximately 7-8% in this quarter," the report said.

MUMBAI:

The Maharashtra Chamber of Housing Industry (MCHI) met chief minister Prithviraj Chavan on Tuesday demanding rollback of Ready Reckoner (RR) rates to 2011 levels and a solution for the enormous delay from the state administration in getting clearances for building projects.

"The MCHI informed Chavan that the steep rise of 46% in RR rates is one of the key reasons for the common man finding property prices unaffordable. The delegation requested the administration to roll back the prices to 2011 levels," said a senior Mantralaya official.

TOI has recently reported that the state (with effect from January 1, 2012) has increased the RR rates, following which areas like Versova, Prabhadevi and Dadar might see hike of nearly 25 to 35% in property prices. The RR is used to calculate the market value for stamp duty and registration charges and is source of revenue for the state government.

"The MCHI further stated that several permissions from state government and civic administration are required for the building project. Also, it takes many months for obtaining NA (non-agriculture) certificate. This delays the project, escalating its cost. The 'financial burden' is ultimately passed to the flat buyer," the official added. They also requested Chavan to resolve hurdles in creating 5 lakh houses under 'Housing for All' scheme.

MUMBAI:

Mumbai fares poorly on availability of open spaces, compared to cities in India and the rest of the world. London reportedly has a per capita open space of 50 sq metres and Delhi has about 14-15 sq metres, compared to less than two sq metres in Mumbai.

Mumbai, however, has been fighting a losing battle for open spaces over the last few years thanks to a burgeoning population on one hand and encroachments on the other.

"Mumbai's open space count is much worse than most metros in the country. There are hardly any public playgrounds left in the city, they are either encroached upon or used for other purposes," says Nayana Kathpalia, co-convenor of NGO CitiSpace.

Open space concerns are being voiced for a long time now. The Bombay High Court, in a judgment on mill land in 2005, noted kids in the city may be born with mental and physical infirmities if the oxygen levels reduce gradually due to lack of open spaces and recreational facilities.

Mumbai has an abysmal paucity of gardens and playgrounds , leaving the city of 12.47 million gasping.The appalling ratio of 0.03 acres of open space for every 1,000 persons is a far cry from London's 12 acres, New York's four acres and Singapore's six acres per 1,000 people.

A look at the big public grounds in different cities shows that Mumbai lags there as well. New York's Central Park measures 843 acres and London's Hyde Park is 350 acres. Shivaji Park stands at seven acres.

To compound the problem , Mumbai has a smaller area (437 sq km) than New York,Tokyo and Jakarta,but a much higher rate of population growth. This has resulted in a steep rise in the density of the population concentrated within the island city and its suburbs.

Parents complain that the lack of open spaces in the vicinity forces them to take kids to malls and multiplexes . "When we were growing up, there was always space to play. Now, building compounds are taken over by cars, big grounds no longer exist, beaches are dirty.

It leaves us no option but to allow the kids to watch television or to take them to malls and movies," says Mulund resident Priyanka Gupta . Dadar resident Sonali Wagle , who organises trips for children, says, "These days many schools don't have playgrounds as the extra spaces have been taken over by additional school buildings . Children are not actively into sports, which affects their health and thinking ability as they are mostly confined to the house."

City historian Sharda Dwivedi says, "Open spaces are being taken over by clubs inaccessible to the public. We don't have access to the sea except for Gateway of India, Haji Ali, Chowpatty and Marine Drive , or no wonderful parks to boast of. We have Rani Baug, but there too somebody wanted to build a fancy zoo. The nexus between builders and politicians, and overnight changes in laws have contributed to the situation."

The housing authority is offering flats in Santacruz for Rs 25 lakh to IAS and IPS officers, while it has fixed Rs 44 lakh as the price of homes for people with tighter incomes

Rahul Gadpale Senior bureaucrats and police officers will get MHADA flats for a steal while people with tighter incomes will be forced to pay almost double, thanks to the state housing authority, which has got its priorities and mathematics terribly wrong.

The authority - whose much-trumpeted aim is to build low-cost homes for the financially weak - has offered IAS and IPS officers 860-sq ft apartments in Santacruz for a trifling Rs 25 lakh, even though they fall in the high-income group. At the same time, it expects Rs 44 lakh for its smaller homes in the same area from people with average incomes.

(People with a pay of more than Rs 20,000 are ranked in the high-income category, while those earning Rs 10,000 to Rs 15,000 are listed in the middle-income group.)

The Maharashtra Housing Area Development & Authority (MHADA) has finalised two projects on a 9,242-sq mt plot near Kalina University, Santacruz. The first project involves construction of a 12-storey, apartment building - in all 76 flats - for IAS and IPS officers. The other will see construction of 150 tenements, each measuring 830 sq ft, for middle-income groups right next to the building.

MHADA authorities have quoted the rate of Rs 2,888 per sq ft for the flats planned for bureaucrats and cops. The per sq ft price fixed for the tenements is Rs 5,297, nearly double. Shockingly, the rates have been approved by the state administration.

It�s not just the lower rate that government officials and policemen will feel happy about. They will also take pleasure in the fact that the market value of the homes reserved for them is Rs 1.3 crore apiece.

The land on which the two residential projects will come up was earlier set aside for the new Pakistani consulate. The state administration changed its mind after the 26/11 attacks. Later, MHADA decided to allot a part of the plot to Maitri Housing Society formed by senior state bureaucrats.

At first, MHADA decided to only provide the land to the society�s members, mostly IAS and IPS officers, for constructing the 12-storey building. However, it later decided to provide ready flats to the members. The plan for building the tenements for average-income groups next to the building was also sanctioned during this period.

The housing authority, which, according to its own rules, is not supposed to make profits from schemes for the financially weak, will apparently earn more than Rs 57 crore from the tenements project. Ironically, it will execute the apartment scheme on a no-profit-no-loss model.

When Mumbai Mirror contacted MHADA�s CEO and vice-president, Satish Gavai, he expressed shock at the rates approved for the two residential projects. He said that there seemed to be a problem with the pricing policy in this case, and he would seek answers from his staff. Gavai added that the rates might be �revoked�.

NEW DELHI:

Commercial office space take-up across India's top seven cities in 2011 was up 8% over last year, says property consultancy DTZ India.

The demand for office space was high in the first half of 2011 when significant deal closures happened but demand slowed down considerably during the second half. Bangalore, Delhi, Chennai and Mumbai saw higher than the average quarterly take-up during Q4 2011, while the other Indian markets reported weaker sentiment from occupiers.

In the four quarter of 2011, project completions fell by 45% quarter-on-quarter, reflecting declining developer confidence in several markets. Availability continued to decline in most markets in Q4, as demand for space exceeded new supply. Interest rates in India appear to have peaked in the wake of a drop in inflationary pressure during the final quarter of the year. However, occupiers remain cautious regarding the business outlook and expansion plans against a backdrop of global uncertainties.

The next few months are likely to be critical in deciding the direction of the economy and hence the office real estate sector in the country.

The total office stock in 2011 stood at 370.24 million sq ft as compared to 335.40 million sq ft in the previous year, an increase of 9.4% y-o-y. Total new supply in 2011 stood at 34.92 million sq ft as compared to 34.09 million sq ft in 2010.

Kolkata witnessed the highest increase (of 16.5%) in stock y-o-y followed by Pune and Delhi NCR at 14.1% y-o-y and 13.7% y-o-y respectively. Bengaluru witnessed the lowest increase (of 5%) in stock y-o-y followed by Hyderabad and Chennai at 7.4% y-o-y and 7.8% y-o-y respectively.

Overall take-up stood at 36 million sq ft for 2011, representing an increase of 8.8% from last year. Barring Mumbai and Pune, all the seven cities saw an increase in y-o-y take-up. Mumbai witnessed the sharpest fall (of 30%) y-o-y followed by Pune at 25% y-o-y. Bengaluru saw the highest take-up of 11 million sq ft in 2011 followed by Delhi NCR and Mumbai at 6.03 million sq ft and 5.6 million sq ft respectively.

MUMBAI:

Fitch Ratings has said it has a "negative outlook for the Indian real estate sector in 2012 due to weak overall demand and higher construction costs, which are likely to continue to squeeze margins."

The ratings firm pointed out that high interest rates as well as high home prices have reduced the affordability for homebuyers.

For real estate companies, both material and labour costs have increased in 2011 and home sales, which had improved in the first quarter of 2011, have moderated significantly since and are likely to continue at lower levels in the first quarter of 2012 as well.

In the commercial office segment, oversupply of space continues in some markets.. "However, the demand for office space is likely to be maintained at 2011 levels as the hiring momentum of the IT/ITeS sector, the major driver of office space in India, continues in 2012," says Fitch. The demand for retail commercial space, however, is expected to be low in 2012.

Declining profits for real estate companies has resulted in high debt levels for companies, and this is expected to continue in 2012, negatively impacting the creditworthiness of real estate companies. Going forward, the dependence on operational cash flows to fund growth and service debt is likely to increase. Fund raising options for real estate companies are limited due to the cautious approach of banks, weak equity markets and dwindling investment by private equity funds.

Improved macro-economic conditions leading to improved demand would have the potential to improve cash flows to real estate companies and see the outlook revised to stable. Also, the ability to judiciously use cash from liquidating existing inventories, which would improve capital structures, may result in the selective upgrades of companies in the real estate sector, even while the overall outlook is negative.

Residential property market in Mumbai will start witnessing a recovery in the second half of 2012 as it looks set to bottom out by the second quarter of the year, said property consultancy firm Jones Lang LaSalle India.

"The reduction of interest rates expected by the second half of the year will help kick-start a generalized - though cautious - recovery in demand for residential property, leading to an increase in launches," a release from JLL quoted Ramesh Nair, Managing Director - West, Jones Lang LaSalle India as saying.

However, prices at existing under construction projects are unlikely to see appreciation as unsold under-construction stock will increase significantly.

There is lot of scope for strategic pre-launch bulk investment deals by high net-worth individuals who can predict the market's direction. Many high net-worth individual investors would have perceived this trend and already parked their monies in advantageously located residential projects by well-funded developers. Completed high-end projects will become costlier by mid-year, largely because of reduced supply in this segment.

Demand for commercial space in Mumbai in 2012 will be marginally lower than in 2011 with IT and ITES companies becoming even more cautious on account of the expected reduction in IT spend by US and European companies. The tenants will get more options, rational pricing and concessions, the release said.

NEW DELHI:

Country's largest lender State Bank of India has halved the home loan processing fee, a move which could be followed by other public sector lenders in the coming days.

The bank has slashed processing fee on home loan above Rs 75 lakh to Rs 10,000 from Rs 20,000, while for loans between Rs 30-75 lakh, the fees has been reduced to Rs 6,500 from Rs 10,000 earlier, a senior SBI official said.

The new fee structure is applicable starting January 11, the official added.

The official, however, added that the processing fee for loans below Rs 30 lakh continues to be 0.25 per cent of the loan amount.

The reason for slashing fee is to promote home loan products of the bank, the official said.

Competitors like ICICI Bank and Axis Bank charge 0.5 per cent of the loan amount for home loans -- both floating and fixed both.

At the same time, Bank of Baroda levies a charge of 0.4 per cent of the loan amount or maximum limit of Rs 50,000, while Bank of India charges Rs 20,000 flat fee for housing loans between Rs 25-75 lakh.

According to another public sector bank official, banks could offer some incentive to promote home loan product above Rs 30 lakh as there has been some moderation in this segment.

It could be in the form of lowering of fee or some concession in rates if interest rates don't come down by the end of the current fiscal, the official added.

In other retail loans, particularly auto loans, some banks are offering concession in rate as well as waiving of processing charges to garner higher share.

Some bankers also feel that the processing fee may go up in the medium term. However, charges are likely to remain stable for the next couple of months.

"Since most of the banks have done away with pre-payment charges, I feel the processing charge in the industry as a whole would tend to go up in the medium term if not in the short run," Axis Bank Head (consumer lending and payments) Jairam Sridharan said.

Last year, housing finance regulator National Housing Bank had directed all housing finance companies to desist from imposing a pre-payment penalty on home loan borrowers. Subsequently, many banks announced abolition of such charges.

Mumbai:

The proposed 35.6-km coastal freeway on the west coast of Mumbai will start from the MLA Hostel at Nariman Point and snake its way right up to Malad-Kandivli with 18 exit and entry points along the stretch. The final report of the ambitious plan, prepared by an 11-member joint technical committee, was submitted to chief minister Prithviraj Chavan on Tuesday.

Slated to cost Rs 8,000-9,000 crore, to be recovered by way of toll, the proposal envisages creating 75 hectares�- around nine Oval Maidans�of green open spaces and waterfronts along the coastal road. The committee said reclamation in an average width of about 100 metres does not cause any impact on tidal movements and there are �no adverse effects to the coastline as envisaged�. The total reclamation in the sea and in the mangroves could be between 18km and 26km, depending on the two options that the experts have placed before the state government.

BETTER MUMBAI LIFE?

� The coastal road will stretch from the MLA Hostel at Nariman Point to Malad-Kandivli

� Freeway will have 18 entry, exit points

� Is slated to cost 8,000-9,000 crore, to be recovered by way of toll

� Reclamation will have no adverse effects, will improve quality of life in congested Mumbai, says expert panel.

The new year has seen the state government redefine its presence and underscore its role as a major 'influencing factor' when it comes to Mumbai's real estate, says developer Vivek Abrol. "Rather sadly, the move on ready reckoner (RR) rates and also the amended DCR, will not help the cause of 'affordable housing' in 2012. I do not understand the logic where on one hand 60 per cent premium is imposed on developers and in the same breath, there is a mention of affordable homes or residential realty prices being corrected. I foresee 2012 to be just as challenging for a home seeker to make his or her dream home into a reality," he opines.

Real estate expert Ajit K Mathur echoes the sentiment. He feels that the new DCR norms will not bring down realty rates as stated by the Maharashtra chief minister Prithivraj Chavan. �Going into 2012, I see price points of flats increasing by a minimum of 15 per cent," he predicts. On the positive side, he feels that the recent policy changes will augur well for the industry and the public at large, as the new policy will create a level playing field for all builders/developers and will speed up the approval process, given that the BMC will approve all the plans at the executive engineers' level. He suggests, tackling Mumbai's housing shortage by increasing FSI at least to two or 2.5 in the suburbs, to release larger housing stocks to the masses and give a boost to the real estate housing sector.

Currently, buyers are not expressing any interest in projects that are perceived to be overpriced and this trend will continue throughout the first half of 2012, says Ramesh Nair, MD - west, Jones Lang LaSalle India. "In this period, the city's residential market will be more or less sustained by the sale of affordably priced mid-income apartments. This absorption will be driven by both, end-users and HNI investors. However, completed high-end projects will become costlier by mid-year, largely because of reduced supply in this segment. The new DCR regulations would further impact the new launches in the first half," he forecasts.

"This is the beginning of an unhappy year for the customers," views Paras Gundecha, president of the MCHI, the representative body of the real estate industry. The industry, on behalf of the consumers, has been campaigning for a reduction in RR rates by 20 per cent, since the rates have been very high. The MCHI had, in fact, represented to the state revenue minister Balasaheb Thorat explaining the hardships being faced by the customers in view of burden on account of inflation, service tax, high cost of funding, VAT and labour cess, Gundecha said. "At one stage, we were even given to understand that the government planned to maintain a status quo on RR rates which we welcomed," he said and expressed shock at the decision to hike the rates instead. By government's own admission, the stamp duty collection had fallen by over 30 per cent last year due to low sales of property, he said and pointed out that the increase in RR rates will now lead to a hike in stamp duty. "Any more financial burden on the customer is bound affect the sales further," he said. "Since there are widespread qualms about the inclusive market and the likelihood of further interest rate hikes by the RBI in the early part of 2012, outlook on the residential market will remain cautious over the short term," says Vishwajeet Jhavar, CEO, Marvel Realtors. However, as the Indian economy continues to show its buoyancy in 2012, foreign investors will gain confidence and India will become attractive among competing investment destinations, says Jhavar. He also predicts that the residential developers will continue to tackle the current liquidity crunch in 2012. "However, as demand improves, improving sales will benefit those developers who will focus on execution of their ongoing project portfolios," he suggests. The last word on 2012 comes from a Thane-based real estate personality Jitendra Mehta, who expects 2012 to see a hike in realty rates with not much good news coming from the RBI in terms of home loan interest rates.

Mumbai's real estate is more valuable than gold, but the tax collection on that property is very small. In the past decade the price of a flat in any part of the city has more than doubled, but property tax collection has not. How is that possible?

The same is not true for national income. India's GDP in nominal terms has been growing at around 12 to 15 percent on average. But income tax collection has not only kept pace, but grown at twice that rate.

That's because more and more people are "caught" in the tax net, thanks to uniform use of the PAN card. It is also because of extensive application of information technology (IT), which is now able to link an individual's bank account, mutual fund and stock market investment, salary account and the PAN card. It is also because tax rates are low enough to deter tax avoidance. The hassle of dodging income tax is not worth it, for most people.

This same phenomenon was seen in the sales tax collection of Maharashtra state. Without changing any tax rate, sales tax collection in the state zoomed last year, simply with better application of IT, e-chalans and compulsory net banking payment. This has made the state's sales tax machinery a model for the rest of the country. Hence it is a mystery why property tax collection in cities like Mumbai and Pune do not keep pace with property values.

Whenever a property changes hands, the state collects stamp duty. This too has been low, but not as much as property tax which goes to the city (and not the state). The stamp duty is based on a ready reckoner (RR), an official document published and updated by the government.

This week the Chief Minister decreed that the RR rates be raised across the board, to bring them closer to reality. This led to howls of protest from the builder community. The realty guys denied the reality of the new RR rates. How do you know which price is accurate?

Actually Mumbai's realty prices are the city's worst kept secret. Even a school kid, or a building watchman knows the "true" price of a flat. To them if you show the ready reckoner, they would laugh. And yet there is an inbuilt conspiracy of silence or secrecy, which keeps RR rates immobile even as actual realty rates soar. The CM's move resulted in RR rates to go up anywhere between 30 to 100 percent in typical middle class areas of the city, like Dadar and Vile Parle.

Similar overdue reforms were also brought to the FSI. There too was a cozy conspiracy between buyers and builders of flats, wherein "free" FSI to be used for flower-beds was being charged under the table. On the books of the corporation if the chargeable area was 1000, the actual sold area was 1500, including flower-beds, open terraces, niches and balcony. Neither the corporation nor the state government got any share of this sale.

The Municipal Commissioner has said that builders would bribe officials to get a large portion of "free" FSI. And there was a cozy silence all round. With this reform, pushed by the CM to an applause of protest from many quarters, the FSI regime has become more transparent. It will put the flower-beds in bright sunshine of transparency. And it will also generate more cash for the government. Not too long ago was the parking lot FSI scam, which was stamped out quickly by the incoming CM.

The FSI was never meant to be a fiscal tool, nor a shady instrument to be dealt under the table between approving authorities, builders and buyers. Greater transparency, and lesser discretion in the approval process is always welcome. Next step: online approvals!

Mumbai's largest luxury tower, and a landmark at Worli naka because of its sheer bulk, has been stalled.

Late last week, the Brihanmumbai Municipal Corporation threw the rulebook at the developers of Palais Royale, named after the famed Versailles Palace, and a tad less opulent. They have accused the developers - Shree Ram Urban Infrastructure Ltd - of combining two plots without permissions from the BMC's improvement committee. They have also charged them with building beyond permissions they've been granted and ignoring the phase-wise work commencement certificate.

For any building, irrespective of the height, the BMC grants phase-wise commencement certificates. In this case, while Shree Ram Urban Infrastructure Ltd had commencement certificates to build up to seven storeys, they have gone ahead and constructed 10 so far.

While Vikas Kasliwal, Vice-chairman & CEO of Shree Ram Urban Infrastructure, remained unavailable for comment, BMC's chief engineer (Development and Planning) Sudhir Ghate confirmed the stop work notice, saying, "We have asked for a detailed progress report regarding the construction. Once the report is handed to us, we will decide on what action should be taken."

The 1000-ft tower, under construction on the land on which Shree Ram Mills stood, was scheduled to be unveiled less than 12 months from now and many of the apartments have been pre-sold. When completed, the building will be around 150 ft higher than Shapoorji Pallonji's twin towers, Imperial Heights, in Tardeo, but shorter than Lodha's World One - a project that was announced after Palais Royale.houses, some of which are spread over 10,000 square feet, are priced between Rs 50 crore and Rs 100 crore. They can be purchased only by invitation.

BMC sources, however, said that the nature of the infringements meant a quick settlement was unlikely.

The notice, signed by Milind Borikar, Assistant Engineer (Building Proposal), asks Shree Ram Mills Ltd to "stop the erection of the said building" with immediate effect. It goes on to add that any person continuing to work at the site would be removed by the police, and that any equipment on the site should be moved immediately.

"The developers have amalgamated two plots without the Improvement Committee's approval, and submitted plans for redevelopment a few months ago," a BMC source said. "BMC guidelines are clear: developers have to submit plans to obtain commencement certificates at every phase, which Palais Royale builders didn't. They also constructed beyond the commencement certificate which they were issued," he added.

Since work began on Palais Royale on a six-acre portion of the mill plot around four years ago, the plan has undergone quite a few changes. The project is spearheaded by Vikas Kasliwal, Vice-chairman & CEO of Shree Ram Urban Infrastructure, who also owns Shree Ram Mills. The company owns around 17 acres of land in Worli and Lower Parel, valued around Rs 2,000 crore.

The company's liaison officer, Vijay Pawar, refused to respond to phone calls and SMSes.

A 14-storey building in Walkeshwar is going to be demolished soon, the Bombay High Court was told recently. The bare structure has been the centre of much controversy for the last 30 years.

Sunil Mantri, owner of Sunil Mantri Realty Private Ltd took over the development of the building in 2006, after several violations were reported in this structure. On January 5, Omkar Geedh, lawyer of Ruby Terrace, the co-operative society, told the court in response to a petition that first the school on the first floor of the building will be moved to another place within a 3-kilometre radius. Within 90 days of the multi-storeyed building being vacated, it will be demolished. The developer will shift the school within three months.

In 2010 residents of Vitthal Niwas, who are tenants on the property where Ruby Terrace has come up, went to the court against Mantri Realty saying that the developer was delaying the redevelopment despite having taken a loan for developing the property in 2008.

Among the petitioners was the school, Sheth Hansraj P Shroff Shishu Shikshan Mandir, which was worried about getting an alternate accommodation. The pre-primary school, which is nearly 50 years old, was located in the old structure that stood at the same spot. The management has told the court that they will shift to the alternate accommodation within a period of two weeks once possession is handed over.

The tenants were worried about the delay in the redevelopment and feared that flats promised to them in the new building would not materialise.

Kamlesh Jaiswal, a tenant and son of one of the petitioners who moved the HC, said, "First we found that the building which had come up would not get clearance. More than a decade later Mantri came into the picture and then we were told that the firm would demolish this building and construct a new one here which would come up as per the new DC Rules� It�s been a very long wait." The society proposed for the 14-storeyed structure was called Walkeshwar Ruby Terrace Co-operative Housing Society.

Sunil Mantri told Mumbai Mirror, "We also have permission to construct here now. As for the tenants, they will get area equal to what they have been living in as per the agreement. There were issues that were raised by them for delay, but we had to get all the clearances and only then could work start. We will demolish the structure, once the school is shifted," he said.

The court has now disposed the petition.

A very long wait

In 1980 the original building on this Walkeshwar plot was demolished and by 1982 a new 14-storeyed building was constructed. However, the then collector Arun Bhatia found several FSI violations in the building and ordered a stay on construction, leaving the skeletal building as it was.

Between 1999 and 2000 another developer entered the picture. This time as well the matter reached the High Court which ordered a stay on construction after allegations of 16 bogus tenancies were made.

In 2006, Mantri Reality took over the project. However, when the building hadn't been demolished even by 2010, worried residents approached the court.

MUMBAI:

Realty major Housing Development and Infrastructure Limited (HDIL) is said to be in advanced stages to sell 7,547 sq m or roughly 2 acres of land located next to the proposed Metro car shed at Versova, Andheri (W).

The deal (land plus development rights) is estimated to be over Rs 300 crore. The buyer is reportedly another major real estate developer.

The land is part of an 8,000 sq m plot, where HDIL is constructing a residential building. However, Sarang Wadhawan, managing director of HDIL, was unavailable for comment.

In another development, real estate company Sunteck Realty is close to signing an agreement with a private owner for the purchase of 10 acres at Goregaon (E) for approximately Rs 350 crore.

The owner of the land is a low-profile businessman specializing in construction of industrial sheds. The plot is located close to the railway crossing between Jogeshwari and Goregaon. According to sources, a portion of the land is vacant while there are cattle sheds on another part. Following the increase in suburban floor space index (FSI), the developer can avail an FSI of 2.75 on the plot.

Kamal Khetan, chairman of Sunteck, did not comment on the deal in the offing.

Property experts say the transaction indicates that land prices are still high. "While there is no comparison between the locations of the two plots, prices are still high," said a realty analyst.

NEW DELHI:

Investments by private equity funds in Indian real estate grew 69% in 2011, said research firm Venture Intelligence, which tracks PE and VC investment activity in India.

Of the 69 transactions that happened during the year, 53 had an announced value of $2,679 million compared to $1,582 million across 63 investments in 2010. The year 2011 saw increased private equity activity in the sector as real estate developers faced a cash crunch. This was because of a drop in home sales as well as banks reducing their exposure to real estate companies.

Residential projects accounted for 57% of the investments (by volume) during 2011, followed by commercial projects with a 19% share of the pie.

In 2011, Warburg Pincus invested over $318 million in its residential segment focused joint venture with portfolio company Lemon Tree Hotels and Blackstone invested $200 million in Bangalore's Manyata Embassy Business Park.

In the year 2011, real estate private equity funds made 19 exits compared to just 8 in 2010. About 14 of the exits announced in 2011 had a deal value of $603 million, according to Venture Intelligence. Kotak Realty Fund sold its stake in an IT Park in Mumbai's Goregaon area for $86 million to Tata Realty Initiatives Fund.

MUMBAI:

Realty developer Housing Development & Infrastructure is close to selling nearly two acres land parcel in Andheri suburb of Mumbai. The deal with another realty developer is estimated to be over Rs 300 crore including the development rights, said people familiar with the matter.

HDIL declined to comment for the story.

This plot is part of a large parcel on which HDIL is constructing a residential project Metropolis with saleable area of 650,000 sq ft. The company was also planning to construct around 1 million sq ft of commercial space as part of this mixed-use project. Out of the commercial projects, the company had already pre-leased around 10% of the space that was earmarked for retail development.

According to realty industry experts, the move to sell part of this land parcel is aimed reducing the company's debt burden. As on September end, the developer's net debt stood at Rs 3,944.78 crore with debt equity ratio of 0.4 times, the company had said in its quarterly earnings presentation.

On Tuesday, shares of HDIL closed at Rs 70.80 on the Bombay Stock Exchange, up 13.2% from previous close.

MUMBAI:

Realty developer Sunteck Realty has entered into an agreement to acquire over 10 acres land parcel in Goregaon suburb of Mumbai for nearly Rs 350 crore. The developer is also in talks with a private equity firm to join hands for the proposed development on this land parcel, said people familiar with the matter.

Sunteck Realty is looking to get financing of nearly $30 million initially through the private equity transaction. Officials of Sunteck Realty declined to comment.

Currently, a part of this land parcel is occupied by cattle sheds, while rest is a vacant plot. The developer can avail total floor space index of 2.75 on the plot following the recent hike in FSI for Mumbai suburbs, market experts said.

The land deal was in the making for almost 8-10 months as the company had signed a pact with the seller almost 10 months ago.

In Goregaon, the company already has one ongoing project Sunteck City priced at Rs 9,500 per sq ft.

Apart from undertaking projects independently, Sunteck Realty also has a joint venture with Ajay Piramal Group's Piramal Realty that focuses on high-end realty projects in metros and select tier II cities in India and strategic overseas locations.

On Tuesday, shares of Sunteck Realty closed at Rs 246.90 on Bombay Stock Exchange, down 19.8% from previous close.

KALYAN:

Giving relief to around 40,000 residents who have not paid their property taxes for more than two years, the Kalyan-Dombivli Municipal Corporation (KDMC) has decided to give them a discount on their dues.

KDMC commissioner Ramnath Sonawane said that the decision has been taken in order to increase the corporation's fund. Those who have not paid property tax for more than five years will get discount of 10%, while those who haven't paid tax for more than two years get 7% off on their pending dues.

The decision comes after the state government cleared the KDMC general body's decision to give relief to those who could not pay their dues. Once the pending taxes are collected, the corporation's funds will increase by Rs 107 crore.

MUMBAI:

When they were boys, Ajay Gadre and his friends were responsible for many a broken window in their neighbourhood. He recalls one home in particular, from where the ball would always return in two pieces. A search for the cause led him to the discovery of an interesting neighbour, Fatima, about whom he refuses to divulge any more information.

Gadre's generation is probably the last in Mumbai with such bragging rights. That is because today's children live in apartments so high that even a ball hit by Tendulkar cannot enter them. Children now prefer to kick a football with an arrow key and swing a bat with the space bar. So entrenched have couch-potato habits become that to discourage the trend, a children's TV channel recently launched a campaign where it went blank for 30 minutes, encouraging viewers to go out, grab some sunshine and play.

Gully cricket is not the only sport that has fallen victim to high-rises and gated communities, and computer games and children's television channels. Hide-and seek, lagori and gilli danda, all have few takers today. As a result, children's anecdote banks have depleted. Anecdotes like what Sunil Mehta, a finance executive, relates. "During a game of hide-and-seek, I would go home and take a nap while my friends would spend hours inside cupboards, behind water tankers and under parked cars. After a few hours, they would realize no one was trying to find them out," said Mehta, laughing at the memories of the Colaba housing society where he grew up. Even today, his childhood friends come together for building reunions. "Some of us have moved out, but we meet every other Sunday. My closest friends are my building friends," he said.

For Shashikant Sawant, who grew up in Bandra and now lives in Vashi, childhood encompassed everything from lagori, where two teams have to topple a pile of stones, to gilli danda, which is played with two wooden sticks, one used to hit the other. The team of boys Sawant was part of would meet regularly near the Sena office and so was called 'Shiv Sena'. Their daily ritual was to build strategies and play against a team of boys that would meet near the Congress office. Sawant knew all the children in the neighbourhood and their grandmothers because he used to spend a lot of time outdoors. He would eat at any of his friends' places and volunteer to buy vegetables for their mothers. "But my nephew, he is afraid of entering even the next building," he said with sadness.

Children no longer have such stories to share. They make friends at hobby classes, play dates or school. Akshay Asher (10) from Wadala goes to Five Gardens to play, but is usually so busy at his game console that he barely gets time to make friends. "Go to any housing society and you will most likely see children playing with their maids," said Preeti Sharma, an architecture student "infamous for ringing doorbells and escaping with my gang of building friends".

Recollecting his favourite game, hide-andseek, Dadar resident Manoj Kulkarni said: "I knew which buildings had two entrances and in which buildings the toilets smelled foul." The game would encompass an entire colony, resembling a Bollywood chase scene with boys crossing hurdles, jumping over walls and pushing carts along the way.

"I don't get to hear the specific sounds associated with children playing in my building anymore," said filmmaker Ashoke Pandit, who resides in Juhu. He recounted childhood memories of rolling bicycle tyres with sticks and playing with his friends jhaadbunder, in which one has to throw a stone as far as possible for a seeker, and before he can return with the object, everyone in the thrower's group has to climb up trees and hide. Coming back to the present, Pandit paused for breath. Then he asked, rhetorically, "Where are the trees now?"

MUMBAI:

The new development control rules (DCR) to streamline building approvals, okayed by the CM on Tuesday, may succeed in reining in errant builders, but there is criticism that they do little to improve your quality of life.

The policy's emphasis, activists said, is mainly on how much revenue the BMC can earn by charging builders for areas they used to earlier utilize illegally. While the intention is noble-to break the nexus of builders and civic officials who approve building plans-residents themselves are just an afterthought, they added.

The BMC, to give one example, has set restrictions on the height of the ceiling from 4.2 m to 3.9 m as it is often misused to add a mezzanine floor. Experts said limiting ceiling height in a humid city like Mumbai, just because the civic administration does not have the mechanism to check abuse of law, robs those who want high ceilings of that option.

"It is the failure of the system to check the misuse, why should it reduce the occupant's quality of life," said an architect. "Not all can afford air-conditioning. For those who can't, a high ceiling with a fan means more air circulation. The new policy is penalizing the occupant who may not want to break the law."

Housing activist P K Das said the reduction in the mandatory open space around a building to just 1.5 m means that highrises will be barely 10 ft apart from each other. "Lack of privacy, light and ventilation adversely affect quality of life. With boundary walls built within buildings with a meagre setback area, fire engines can never enter a plot and it is impossible to fight a fire at the rear of a building," he said.

Das said when the policy was being formulated, he had suggested a minimum compulsory open space of 3 m around a building, although municipal commissioner Subodh Kumar had recommended 6 m. But many elected representatives, including Congress MLAs, protested. They countered that redevelopment projects in the island city would not take off because most plots are extremely narrow.

Dr Altaf Patel of Jaslok Hospital said, "Noise and stress levels are going up, and lack of privacy is so great that it is causing frustration and mental problems."

MUMBAI:

Home buyers are often forced to pay more than the actual area of the flats and the amenities provided to them.

To put a stop to this malpractice , the government has decided to make it mandatory for developers to specify the amount paid by the buyer towards amenities such as common terrace, staircases and common passage and parking space separately in the agreement executed by the owner. The nature and size of these facilities will also have to be specified.

The provision is a part of the Maharashtra Housing (Regulation and Promotion of Construction. Sale, Management and Transfer), Act, which is meant to protect flatbuyers from unscrupulous developers and save them the trouble of the difficulties related to home deals.

The Act was approved by the state cabinet on Wednesday and is likely to be tabled before the legislature in the upcoming assembly session.

The clause states that along with the price of the flat, the agreement between the developer and the purchaser (must be done upon the payment of 20% or more of transaction cost) must separately specify the proportionate price collected towards "limited common areas and facilities" and parking spaces.

The "limited common areas and facilities" have been defined as entrance hall, staircase, lift and common passage on each floor, fire fighting systems, refuge area, service floors and the terrace. The nature and size of these amenities, along with information on parks and recreation facilities will have to be specified.

Flat buyers are often forced to pay for these facilities (which are added in the transaction cost) without any knowledge of their size and the amount collected towards these. Cases in which flat purchasers have paid much more for these areas than due are not uncommon.

The new law contains provisions requiring developers to register themselves and disclose complete details of a project before selling flats before a housing authority.

Change in conveyance clause

In a shift in stand over conveyance for layouts involving multiple buildings or phasewise development, the new Act requires developers to form a federation or an apex body of all housing societies within the layout in a stipulated timeframe.

The apex body will administer and maintain the amenities and facilities in the common area within the layout. The plot will be conveyed to this federation , while individual societies will enjoy title rights of built-up areas in their possession . The government has also modified the deemed conveyance procedure slightly to facilitate the process.

MUMBAI:

Going by a new circular issued by the Maharashtra inspector-general of registration (IGR), if owners delay the registrations of their properties by more than eight months, they will have to pay the stamp duty according to the current market value and not going by the rates prevalent at the time of purchase.

The rule pertains to the sale, purchase or gift of land, flats or commercial offices.

Government officials said they were compelled to issue this circular as many did not register their properties to avoid paying stamp duty and registration fees; absence of registered documents often led to multiple-transaction frauds.

According to the Registration Act, property agreements should be registered with the stamp duty and registration office within four months of the date of execution. In case of an emergency or a court case, another four months are given to register the documents.

But, during the extension period, the registration is done only on the payment of a penalty, not exceeding 10 times the amount of the registration fee. Sub-registrars will have to check the date on the confirmation deedthrough which a person confirms the transfer of a property to another through sale, gift, joint venture etc-or declaration deed-containing brief description of the property be it land, flat, location, area of the flat/land, name of the owner. These two are attached to the property papers when submitted for registration after the expiry of the deadlines.

"Of the cases filed against us, most are about fraud and forgery cases of multiple registrations . Though the Registration Act say sub-registrars should not register these documents when submitted eight months too late, the department accepts them without verifying the number of times the same property has been registered to multiple owners," said a senior government officer.

According to brokers, with many property documents not being registered and so, not in public domain, they would have a hard time verifying the ownership. "This lack of clarity have resulted in fraudsters, with support from corrupt sub-registrars , cheating genuine citizens of their hard-earned money by selling a property to multiple buyers. This kind of cheating is the most prevalent in land deals in which property cards had not yet been updated," said a broker.

The department has cited the Supreme Court judgment which says "if the two documents are essentially distinct , being stamped and executed to effect different objects , the registrar has no power to register them as one, even if the party presenting them for registration styles one of them to be the annexure of the other especially where the registration of the document styled the annexure or appendix is barred by limitation."

MUMBAI:

Days after the state cabinet approved a legislation meant to improve transparency in the housing sector, activists have objected to certain "grey areas".

The cabinet approved the Maharashtra Housing (Regulation and Promotion of Construction, Sale, Management and Transfer) Act, which contains provisions for the formation of a housing authority and an appellate tribunal. To be put up for approval before the state legislature during the budget session, the Act will replace the existing Maharashtra Ownership Flats Act (MOFA), 1963, which was also meant to provide relief to flat purchasers against malpractices by developers in construction, sale and transfer of flats.

Provisions of the MOFA have been included in the new Act. Activists, however, observed that some modifications or new clauses introduced went against the "interests of a flat purchaser".

Ramesh Prabhu, chairman, Maharashtra Societies' Welfare Association (MSWA), alleged that the new Act recognizes the right of a builder to sell car parking areas to flat purchasers.

Objecting to a clause which states that the builder should mention the proportionate price of parking spaces separately in the agreement, Prabhu claimed that there existed a Supreme Court directive in this regard, which prohibited selling of car parking.

'Open space can be misused'

Activists have decried 'grey areas' in the new housing regulation Act. Advocate Vinod Sampat, president of Cooperative Societies', Residents and Users Welfare Association, said the clause relating to pricing of parking lots "completely disregards the SC directive".

State officials however said that the provision was only meant to bring in more transparency in home deals. Even the model guidelines formulated by the Centre in this regard make a similar provision, an official added.

Chairman of MSWA Ramesh Prabhu further alleged that the new Act recognizes the right of the developer to sell utility areas like dry balconies, flower beds, pocket terraces, which were not provided for in MOFA. The official however said that these spaces are anyway being sold.

Activists opposed another clause which permitted promoters/developers to amend or modify the layout including recreation grounds, gardens and playgrounds. Prabhu said that this too contradicted another SC verdict. Sampat said that this could amount to "fleecing" of the flat buyer. "A flat purchaser often buys a house on the basis of the open space shown in the layout. By allowing developers to amend plans, the state is only facilitating an exercise wherein he can construct on that open space," he said.

Prabhu also objected to a condition imposed for the formation of a cooperative society. "It states that for the registration of a society, all flat owners have to pay the full consideration amount towards the purchase and other amounts. This means, if the developer chooses to keep amounts payable by one or two flat buyers pending, the registration of the society and the conveyance of the land and building will become difficult," he said. Sampat alleged that the MOFA Act did not contain this provision.

Both also objected to the provision stating that it would not be necessary for the promoter to obtain consent of permission from flat purchasers for utilizing FSI, TDR and or additional FSI in a bigger sized (layout) plot. A state official however said that this was only applicable for FSI and TDR remaining after conveyance of common amenities to a federation of societies, and buildings to individual societies.

MUMBAI:

Notwithstanding the economic slowdown and high property prices, which resulted in at least 25% drop in sales registrations in Mumbai, the state government has increased the Ready Reckoner (RR) rates by an average 17% in the city with effect from January 1, 2012. However, some prime areas like Versova, Prabhadevi, Cuffe Parade and Dadar will see hikes of up to 30%, while Vile Parle will see a 140% jump.

The RR is used to calculate the market value of flats for stamp duty and registration charges, which are major sources of revenue for the government after sales tax and value-added tax. As regards the rest of Maharashtra, the revision in the RR rates will be in the range of 5-30%. This year too, the government has based its RR calculus on the built-up area, a deviation from its decision of 2008 when it was based on the carpet area.

But experts say the 17% hike will not have any major impact on transactions of new flats as the rates quoted by developers in some places are almost 40-80% higher than that quoted in the RR. The hike will, however, hurt sales and purchases of old flats because of the 16% rise in the cost of construction under the new calculus.

Rajesh Mehta, director of Raha Realtors, said the rise in construction cost would deal a major blow to redevelopment schemes as in these projects, the developers base their profitability on the amount they have to spend on the construction.

Mehta said, "In cases of resale of old apartments, the RR value will be marginally higher than the agreement value. Due to this, the burden of the additional stamp duty will have to be borne by the buyer of the flat. Besides, there will be an impact on the capital gains tax calculations. under section 50 (c) of the Income Tax Act for the developer.'' According to revenue officials, the RR rate hike remained at an average 10% in 2006, 2007, 2008, 2009 and 2010.

However, in the year 2011, the rates were increased by an average 30%. In the Mumbai area, the collection of stamp duty as well as registration fell by 25% to Rs 2,800 crore in October 2011 against the Rs 3,500 crore collected during the corresponding period in 2010.

MUMBAI:

In one of the biggest decisions of his tenure, chief minister Prithviraj Chavan on Tuesday okayed a path-breaking policy to streamline building approvalsin the city and check the nexus between unscrupulous developers and municipal officials who sanction building plans.

Formulated by municipal commissioner Subodh Kumar, the policy will curtail his own discretionary powers to grant building concessions to developers. Most building files will now be approved at the civic executive engineer's level and only in rare cases will they be put up before the commissioner.

The new policy will levy a heavy premium on builders who want to build a little more than the permissible floor space index (FSI)-the ratio of the total built-up area vis-a-vis the plot size. The BMC hopes to earn around Rs 1,000 crore a year by charging this premium.

The amended policy offers 35% compensatory floor space index for residential buildings and 20% for both commercial and industrial structures.

What the new rules say Areas like balcony, flower beds, etc. to be counted in FSI. In lieu, builders will get compensatory FSI of 35% for houses and 20% for commercial structures 25% extra parking to be allowed sans premium but without counting it in FSI t Balcony area will be included in FSI, charged a premium t 60%, 80% and 100% premium of ready reckoner rates for extra FSI in residential, industrial and commercial buildings.

MUMBAI:

Developers in Maharashtra will have to display details of their projects on the website of the Housing Regulatory Authority before a transaction.

The state cabinet has approved the setting up of the Housing Regulatory Authority and the Housing Appellate Tribunal (HAT), though it will take at least nine months before the two are constituted.

The Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act 1963 is being sought to be repealed and replaced with the Maharashtra Housing (Regulation and Promotion of Construction, Sale, Management and Transfer) Act, 2011. The Act will establish a Housing Regulatory Authority (HRA) and a Housing Appellate Tribunal (HAT).

The government is likely to place the Bill before the state legislature during the budget session in March. Once approved it will require the assent of the Governor and then the President as the Bill also covers the Transfer of Property Act and Contract Act which is the domain of the central government.

"It will take a minimum of six to nine months before the Act comes into force,'' said officials from the housing department.

The proposed rules will certainly bring succour to flat-buyers. The note approved by the cabinet states it will be the liability of the promoter to construct flats according to specifications approved by the local authority. Promoters shall make an application to the HRA for registration of ongoing projects and where occupation certificate is to be obtained. Failure to do so will invite a penalty.

No alterations or additions can be carried out without the approval of the HRA once the plans are disclosed. If possession is not granted within a specified time then the amount is to be refunded with interest not exceeding 15% per annum. Moreover, the advance or deposit taken from a buyer cannot exceed 20% of the price. Defects noticed within three years have to be rectified by the developer free of cost.

Promoters will take steps to form a co-operative society within four months of the issue of occupation certificate or if 60% of buyers have taken possession.

MUMBAI:

Civic chief Subodh Kumar's proposal to streamline building clearances has been okayed by chief minister P r i t h v i r a j Chavan. Earlier, certain areas in a building such as lobbies, flower beds, voids and lily ponds were not included in the FSI, but several builders sold these spaces to buyers at market rate. Flat purchasers would be encouraged to illegally amalgamate these areas to make their apartment rooms bigger by 35% or, in some cases, up to 80%.

Successive municipal commissioners, empowered to grant building concessions, cleared files of certain well-connected developers under political pressure by excluding large areas of their projects from permissible FSI. For example, in case of an upcoming luxury skyscraper in central Mumbai, an earlier civic chief allowed the developer an additional 13,000 square feet on each floor, which was not counted in the FSI. The permitted FSI on each floor here is 17,000 sq ft.

"Ever since I have taken over as CM, I have been trying to bring in transparency and check arbitrary, discretionary decision-making to reduce rent seeking and harassment of people dealing with the government,'' Chavan, who was under tremendous pressure from some within his own party to stall the policy, said. Some of these Congress politicians have turned into builders with large stakes in Mumbai's lucrative property market. They lobbied with senior party members in Delhi, albeit unsuccessfully, to pressurize the CM.

"This will not only establish a level playing field for developers but also reduce arbitrary decision-making. It will bring about an element of certainty amongst investors and lead to a reduction in property prices,'' the CM said.

Under the new policy, premium will be charged based on the Ready Reckoner (RR) rates - 60% for residential buildings, 80% for industrial structures would bring about a "great amount of transparency and create a level playing field'' for builders. Sukhraj Nahar, another builder, agreed, saying the new rules would put all developers on an equal footing. "Buyers will get the promised area of their flats and unscrupulous developers who make tall promises will have to exit the scene," he said.

Architect Hafeez Contractor said although these modifications were "fine", much needs to be done to tackle Mumbai's housing shortage. "This is like giving a drop of water to a man dying of thirst. The city needs more FSI," he said.

Knight Frank (India) chairman Pranay Vakil said developers were bucking the system by procuring areas outside the FSI. "Now, profits from these additional areas will have to be shared with the BMC," he said. According to architect Manoj Daisaria, the approval process will be streamlined. He, however, added the premium rates were too high. Pankaj Joshi, executive director of Urban Design Research Institute, said BMC officials were approving building projects at their "own whims.

This policy is one of the few good things that have happened under the current regime''. and 100% for commercial buildings. However, premium will not be levied on rehab buildings. Developers rehousing tenants of cessed buildings in the island city or existing members of housing societies in the suburbs are exempted from paying a premium. Congress MLA Amin Patel who, at one stage, threatened to resign if a premium was charged on rehab buildings in the island city, said the CM's decision to exempt them and relax the mandatory open spaces around them would boost redevelopment projects.

BMC chief Kumar said, "Builders used to bribe their way through the system to procure these extra areas and sell them to the buyer. The consumer paid the developer earlier, now this money will come to the BMC.'' He told TOI that the premium money will be put in a separate infrastructure fund for Mumbai. He said builders whose projects have already commenced but are still to receive the occupation certificate from the BMC can take advantage of this policy.

MUMBAI:

The long-delayed Dharavi Redevelopment Project could finally get a massive push forward. The state government on Tuesday approved the Development Control Rules (DCR) for redevelopment of Dharavi, Asia's second-largest slum, just ahead of the civic polls.

Announcing the decision at a press conference hurriedly called before the code of conduct comes in force, chief minister Prithviraj Chavan said, "Under the new DCR, the Maharashtra Housing Area Development Authority (Mhada) or any other public sector undertaking will act as a nodal agency for the Dharavi redevelopment project (DRP). Floor space index of 4 will be given for redevelopment which includes rehabilitating eligible slum dwellers in 300 sq ft flats free of cost,'' said Chavan.

The new DCR interestingly, does not put any restrictions on the number of storeys constructed for the slum dwellers. This is surprising as differences on the issue between the stateappointed expert committee headed by former chief secretary D M Sukhankar and project management consultant Mukesh Mehta delayed implementation of the DRP.

"The committee wanted rehab buildings to be of only seven storeys as it felt the livelihood of slum dwellers would be affected if they reside in multi-storey buildings. Why has the government removed the height restriction?'' said an activist.

Mhada vice-president Satish Gavai said livelihoods would be taken care of when approving layouts. "Being the nodal agency for DRP, layout plans require our nod,'' said Gavai.

The decision has given a major impetus to expedite implementation of the Rs 9,000-crore redevelopment of Sector 5 of the Dharavi slum project being redeveloped by Mhada. The agency will float tenders inviting contractors for Sector 5.

In May 2011, the government decided to form a special cell of Mhada to undertake the Rs 2,000-crore redevelopment of Dharavi's Sector 5, a 23-hectare sprawl adjoining the Mahim Nature Park.A new consultant will be appointed soon for the sector. The redevelopment of Sector 5 is expected to generate about 5,000 affordable homes for Mhada, which barely has any land bank in Mumbai.

What the new DCR says for the slum

*Eligible slum dwellers will get 269 sq ft carpet area flats.

*One can avail of additional area on payment of cost of construction.

*FSI of 4 will be provided for redevelopment.

*No height restrictions or the number of storeys for rehabilitating slum dwellers.

*A 10-year corpus fund will be set up for maintenance of buildings.

Transfer fee of approximately Rs 25,000 will be levied to regularise ineligible slum dwellers residing in structures protected under the January 1, 1995, cut off date (This is subject to issuance of final notification of the amendment to the Slums Act, 1971)