Maharashtra will ease the consent requirement to pull down and reconstruct old buildings in a boost to the redevelopment market, especially in a city like Mumbai that has more than 20,000 such structures.
Old and dilapidated buildings can be redeveloped with the approval of 51 percent of residents or tenants, down from 70 percent required now, Chief Minister Devendra Fadnavis announced in the Legislative Assembly on Monday. The state will amend the Maharashtra Apartment Ownership Act to give more rights to citizens to develop their land, he said.
“It is really positive as 70 percent was quite a large number,” said Anuj Puri, chairman of Anarock Property Consultants. There are a lot of dilapidated buildings in Mumbai and the only way to go for redevelopment is to bring the consent threshold down, he said.
Redevelopment projects invariably ran into disputes over differences among residents, alleged lack of transparency in giving out tenders. Developers faced allegations of not delivering what they promised. The state government even came out with guidelines to be followed for redevelopment.
Puri said residents’ concerns over builders not handing over projects on time and diverting funds would be taken care of by the new Real Estate Regulation Act. “Earlier, developers used to overestimate and the occupants never liked it as the timelines were never met. But under RERA, there are severe penalties.”
The proposed amendment in the law to lower the threshold to 51 percent would be extended across the state and would benefit thousands of old buildings, State Housing Minister Prakash Mehta told BloombergQuint. “In Mumbai alone, there are about 20,000 such buildings,” he said.
An official from the chief minister’s office said a government resolution would be passed by the housing department in the coming days with more details on the amendment.
A large number of old buildings are not getting rebuilt because of the 70 percent approval requirement, said Niranjan Hiranandani of the Mumbai-based developer Hiranandani Group. Getting residents to agree is a painstaking task, he said.
The decision is citizen friendly and will help builders keen on redevelopment projects, said Hitesh Thakkar, secretary, National Real Estate Development Council.