Redevelopment Projects in Mumbai Boost Home Sales

An ordinary day on the bustling streets of Bandra turned into a daylight nightmare as Behram Nagar’s 5-storey building collapses in a flash. Mumbai’s Malwani case which had claimed 12 lives in the most severe incident of building collapse has been moved to the High Court. Meanwhile, a simple faulty ceiling on the 3rd floor collapses entrapping 35 people in the building in the posh locale of Fort. What seems like news headlines from yesteryears are actually the recent incidents. Such mishaps are normalised by their developers as inevitable consequences, trying to shed off from the grave responsibility.

The Mahindra Group Chairman, Anand Mahindra tweeted “Monsoon in the ‘Maximum City’ is also a time of the maximum tears. With the chaotic, unplanned construction of the past, so many homes are at risk in the rains. Is it possible to carry out a multi-year survey of all structures at risk and reinforce them to prevent collapse?”

While these measures intend to prevent the collapse, the inevitability of a worn-out foundation overpowers these restorations. Mumbai floods of 2005 were a prime testament to a dire need for renovation from ground zero, as the repercussions were observed even years later, with faulty ceilings, rusty buildings, and ripped walls. Navigating the complex regulatory landscape and obtaining necessary approvals for redevelopment projects is crucial to ensure that these renovations are effective and compliant with safety standards.

Industry experts have argued that the longevity of construction should not be undermined with a few temporary renovations, rather permanent, more re-establishing measures are required for reliability.

In short, this situation entails for redevelopment procedure:

Basic Concept of Redevelopment

Redevelopment is demolishing the existing structure altogether and constructing new architecture on that land. Basically, the benefits of this process are two-fold:

• The first is that the latest upgrades in modern architecture can be implemented.
• And secondly, idle land can be optimised for a better purpose, even in prime locations without huge investments upfront.

The market value of the redeveloped project is substantially higher than that of a repaired project. The other aspect is that if the housing society is located in a posh locale, then the real estate value would increase further after redevelopment, ensuring better ROI. The housing society members can request changes in configurations, implement amenities, and revamp the area at the same time maintaining the FSI (Floor-Space Index). To get more insight into how FSI is executed in a project, check out Kolte Patil Jai Vijay project.

Moreover, redevelopment is the only resolution to control prices and boost supply in urban areas facing a housing crisis. So far, limited projects on unused land have been possible in Mumbai out of which some prominent properties of 2021 are at Kolte Patil Goregaon West, Kolte Patil Borivali West, and Kolte Patil Vile Parle.

Overall, old building redevelopment rehabilitates into a superior phase within the bonds of your previous home.

Why is Mumbai Redevelopment a Necessity?

Mumbai has an unwavering position as a highly aspired residence even after the high cost of living, or congested spaces. The USP of Mumbai is its lifestyle and the limitless possibilities that entice people from all over India to invest in homes. While Mumbai is known for its lifestyle, other cities like Pune are making strides with transformative initiatives such as the Pune Smart City & Tech in Real Estate, which are becoming increasingly important in the rapidly evolving real estate market. This rampant requirement of residences has led to a shortage of spaces.

The industry giants focussed on “Greenfield projects” – check out some of these for reference from Kolte Patil developer’s projects in Mumbai like Kolte Patil Vaayu, Kolte Patil Verve, Kolte Patil Evara, Kolte Patil Jai Vijay.

While the suburbs are developed in full force owing to open spaces, the greater Mumbai needs redevelopment to accommodate more residents by increasing the elevations. Sky-rises is the only vertical solution for confined horizontal spaces. Industry Executives have evaluated that Mumbai Metropolitan Region requires approx. 400,000-450,000 units per year. So far, there are 19000 dilapidated buildings in the main city and 5000 in the outskirts. Numerous bids are being made by builders vying for contracts to modernize these aging buildings, highlighting the competitive nature of the redevelopment process.

The success of the redevelopment of old buildings in Mumbai has prompted even the influential names in the industry. Godrej Properties, Hiranandani, Tata Realty & Infrastructure, and Oberoi Realty have all turned tides towards redevelopment for augmenting their profits. A whopping Rs. 30000 crores (Source: Business Standard) has been so far committed to redevelopment.

On the other hand, the government has facilitated the redevelopment projects in Mumbai in and around the slum areas to develop the locale. MHADA (Maharashtra Housing & Development Authority) has approved over 193 projects between April 2020 to August 2021, to encourage redevelopment during the adverse pandemic years. In a way, this helped in stabilising the trembling real estate market.

Jitendra Awhad (Minister of Housing) stated that he fast-tracked the redevelopment of MHADA-led projects. The agencies approving the issued offer letters, cleared various stalled projects in areas like Chikhalwadi, Motilal Nagar, Patra Chawl, and BDD Chawls, revamping the Mumbai scene– one of the primary reasons for redevelopment in Mumbai.

Self-Redevelopment Projects in Mumbai

The other facet of this process that is beneficial for all parties involved, is the self-redevelopment of Housing Societies. In this process, the real estate developer is not involved, rather the architects and contractors come directly into the picture. This way, the housing societies have total control of the level of development they wish to incorporate with fewer risks of fraud and customising the premises.

In March of 2019, Maharashtra Govt declared special incentives towards self-redevelopment, as Mumbai Bank even announced a loan of INR 50 crores per project. This encouraged several other housing societies to follow suit, with such upcoming residential projects in Mumbai to surge in 2021.

Conflict of Interests

Ideally, lawyers draw out a mutual contract between the developer and the residents catering to both. However, the reality pans out with several issues arising out of varied interests. For such Brownfield projects, every decision is inter-connected, which means the developer must comply with the 2-year deadline with a maximum of a year of extension. The developer is expected to give a minimum of 20% of the net project cost back to the bank as a guarantee. They are also responsible for providing alternate accommodations for the residents or offering hefty compensations.

The conflict arises when any of the agreements is not satisfied. Maharashtra govt has set up a separate panel as mediators for the pending lawsuits of ongoing residential projects in Mumbai to push such redevelopment projects boosting the housing sales.

Unified DCPR

Unified Development Control & Promotions Regulations was an initiative by the Maharashtra government to resolve the issues of redevelopment. From lift & lobby requirements to mandatory open spaces, and elevations of the skyrise, TDR (Transfer of Development Rights) all factors are regulated under this clause. The recent updates to this DCPR 2034 clause present more FSI than the previous rules of DCR 1991.

This update has also implemented the highrises as developers are granted permission to construct more floors, from the earlier restriction of 24 m height to 70 m height.

MahaRERA overlooks all these compliances and other formalities, and acts as a facilitator between the housing society and builders.

This rule also ensures that transparency is maintained between the developers and the residents and is citizen-centric for new homebuyers of the redeveloped projects in Mumbai.

Redevelopment Protocol

Step 1: Annual General Body Meeting (AGM) is arranged to pass the resolution for the redevelopment project. The by-laws state that at least 75% of the total members should be in agreement. Meanwhile, smaller, and older buildings need only 51% of approval.

Step 2: A suitable architect and Project Management Consultant (PMC) is appointed that strategizes and monitors the process.

Step 3: An evaluation report is provided by the architect- checking the feasibility, and other prospects.

Step 4: The Housing Society is required to set up tenders for builders/ contractors. Select an apt builder who is compatible with the prerequisites and tenders.

Step 5: The Society sets up an on-camera meeting with the presence of government officials from the deputy registrar’s office to attest to the selection of builder ~ a minimum of 70% of the quorum should vote in favour.

Step 6: A Registered Development Agreement is formulated by the committee with terms, clauses, and power of attorney with the builder. A consent form is signed with an irrevocable agreement.

Step 7: Within the compliances of DCPR, the builder commences the redevelopment.

RERA No.s :

Jai Vijay – P51800004446

Evara –     P51800026949

Vaayu –   P51800029034

Verve –    P51800028783

What are the basic documents required for the Redevelopment project?

Here is the list of some essential documents that one should have: ~society registration certificate ~title certificate ~the original building plans ~flat-wise carpet area list ~a certified property card that shows that property is owned by society ~conveyance deed ~sale deed ~structural audit report ~redevelopment agreement ~copy of the new approved plan ~Development Plan (DP) remark (details of the land and its surrounding area) ~essential supplies bill *These are the basic documents required, for more legal forms you can check the redevelopment manual or get expert consultation.

Is it safe to buy flats in redeveloped projects?

Physically, the attributes of a redeveloped project are the same as greenfield projects, since the original structure is demolished completely. But legally, you have to scan all the agreements, details, and legal documents to avoid getting trapped in lawsuits. Legal consultants can help you with that.

How do I check if my housing society qualifies for redevelopment?

By-law 77 states that a structural audit is to be conducted if the building is more than 30 years old. This audit will determine if your housing society requires self-redevelopment. If it is under 30 years, you can still request an audit if the building seems worn out, permission will be granted based on the conditions.

What about the minority segment that did not approve of the redevelopment? Can they stall the process?

The officials from the Dy. Registrar’s Office will determine all their concerns and based on that pass a judgement on whether the process should proceed.

Is there a third party for unbiased monitoring?

MHADA is the immediate third party involved in the process as all the forms are sent to them for approval. They visit the site for inspection after which they give the necessary NOCs. The second visit is after the residents are vacated and the building is demolished. The commencement certificate-CC is issued only after the inspection.

Who authorises the structural audit?

In order to get precise and untampered reports, the government appoints an architect who conducts these audits.

How to ensure that the residents of the housing society have all transparency with the redevelopment?

The General Body recommends appointing a redevelopment committee in the society which has the power to reject or accept the proposal and give suggestions based on residents’ interests. They are a bridge between the builders and the residents to ensure that all the information is conveyed to both parties.

Introduction to Mumbai’s Real Estate Market

Mumbai’s real estate market is experiencing a significant surge in redevelopment projects, with numerous housing societies opting to upgrade their residential buildings. This trend is driven by the demand for new apartments and the need for urban renewal, making it an attractive investment opportunity for developers and buyers alike. The Maharashtra government has introduced policies to support redevelopment, simplifying the entire process for housing societies and ensuring they reap the benefits of redevelopment. With the expertise of construction experts and developers, Mumbai’s cityscape is transforming, offering residents a chance to own their dream home in a redeveloped building. The redevelopment process involves transforming outdated structures into modern, spacious apartments, providing residents with a better quality of life and increased property value.

Benefits of Urban Renewal

Urban renewal through redevelopment projects offers numerous benefits, including improved living conditions, enhanced amenities, and increased property values. Redevelopment helps to revitalize neglected areas, making them more attractive to residents and investors, and contributing to the city’s economic growth. The process of redeveloping residential buildings also creates new opportunities for investment, generating revenue and stimulating economic activity in the area. By redeveloping old buildings, housing societies can take advantage of the benefits of urban renewal, including improved infrastructure, enhanced security features, and better amenities. The redevelopment process also allows for the creation of more open spaces, green areas, and community facilities, making the city a more livable and sustainable place.

Role of Housing Societies

Housing societies play a crucial role in the redevelopment process, as they are responsible for initiating and overseeing the project. The society’s members must work together to decide on the redevelopment plan, select a developer, and navigate the entire process. Housing societies must ensure that the redevelopment project is completed on time, within budget, and to the satisfaction of all members. The society’s committee is responsible for communicating with the developer, ensuring transparency, and keeping members informed throughout the process. By working together, housing societies can ensure that the redevelopment project is a success, providing members with a better quality of life and increased property value.

Government Support and Policies

The Maharashtra government has introduced several policies to support redevelopment projects, including tax incentives, relaxed regulations, and streamlined approval processes. The government’s aim is to encourage redevelopment, making it easier for housing societies to navigate the process and reap the benefits of urban renewal. The development plan for Mumbai includes provisions for redevelopment, ensuring that the city’s infrastructure and amenities are upgraded to meet the needs of its growing population. The government’s support for redevelopment has led to an increase in projects, with many developers investing in the city’s real estate market. By providing a favorable environment for redevelopment, the government is helping to transform Mumbai into a modern, sustainable city with improved living conditions and enhanced amenities.

Market Trends and Outlook

The market trend for redevelopment projects in Mumbai is positive, with increasing demand for new apartments and a growing number of housing societies opting for redevelopment. The outlook for the city’s real estate market is promising, with many developers investing in redevelopment projects and the government providing support through policies and incentives. The future of Mumbai’s real estate market looks bright, with redevelopment projects expected to continue to drive growth and transformation in the city. As the city continues to evolve, redevelopment will play a crucial role in shaping its future, providing residents with better living conditions, enhanced amenities, and increased property values. With the help of construction experts, developers, and government support, Mumbai’s real estate market is poised for continued growth and success, making it an attractive investment opportunity for buyers and developers alike.