I. Mumbai has a total of 104 Maharashtra Housing and Area Development Authority (“MHADA”) layouts, out of which, 56 MHADA housing colonies were old and dilapidated. Most of them were built back in the 1970s and 1980s, and several of them were declared dilapidated and unsafe to reside in. MHADA decided to redevelop these dilapidated housing colonies through developers and prepared a proposal, having options, either of paying a premium or offering housing stock to MHADA and forward such proposal(s) to the State Government, which offered flexibility to developers and incentivised them to take up the redevelopment of these dilapidated colonies.
Until 2008, MHADA used to charge premiums for no-objection certificates and additional Floor Space Index (“FSI”) for the redevelopment of dilapidated colonies in accordance with Development Control Regulation 33(5). In April 2013, the State Government increased the FSI for MHADA buildings from 2.5 times to 3 times on the entire layout.
The proposal was flexible. Therefore, it lured the developers, and they considered redeveloping these housing colonies; however, some developers deviated from the plans that were sanctioned at the time of issuance of the commencement certificate(s), and some of them did not hand over the land to Brihanmumbai Municipal Corporation (“BMC”) required for public purposes or for roads and failed to comply with the terms and conditions of the letter of intent issued by MHADA. Failing which, MHADA halted the issuance of occupation certificate(s) (“OC”) to such buildings. In August 2024, the residents of those buildings that were not having OCs made a request to MHADA for issuing the OC. The proposal was accepted by the Government.
II. MHADA vide its circular dated 11th October 2024 (“Circular”) introduced an amnesty scheme for the next 6 (six) months to give OC to redeveloped buildings built in 56 housing colonies belonging to MHADA. The Circular seeks to address long-standing demands of residents of such redeveloped buildings belonging to MHADA housing colonies, which are fully ready but have no OC. The residents of such buildings can now, pay the necessary charges as stipulated in the Circular and obtain the OC. As per the Circular, for getting OC, the amount to be paid will be directly calculated on the basis of the area given by MHADA. If any OC is pending for want of surrender of land to BMC for a road development plan, then OC will be granted only after surrender of the land to BMC. MHADA has also decided to levy charges on flower bed cum balcony constructed by builders.
The Circular also mentions that the residents of a building without an OC will be subject to enhanced property taxes and may face difficulties in selling (and buying) such properties. Even the water charges levied by BMC will be higher.
III. Thus, the Circular is a big relief to the residents housing colonies who do not have OC. This development will enable them to access essential services and utilities at a reasonable cost that were previously available at a higher cost. Furthermore, it increases the value of the property, including the building credentials and further redevelopment of such buildings.
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