As the Maharashtra government is set to dilute tenants’ protection from aggressive buyouts by builders, real estate developers in the financial capital is set to reap a bonanza through incentive floor space index (FSI) in redevelopment projects involving tenancies that they have acquired or purchased.
Following a fresh legal opinion from the state’s Advocate General (in charge) Anil Singh that laws do not prohibit the transfer or sale of tenancies created before June 13, 1996, builders would get additional floor space incentives in redevelopment projects even when there is no responsibility for rehabilitation or shifting of tenants. Singh has opined that purchasers of tenancies created before June 1996 are eligible for all benefits and entitlements extended to tenants in redevelopment projects.
Among the builders to reap benefits from the move immediately is One Avighna Park, a twin 60-storey super luxury project coming up in Parel. The project, set to be a luxury landmark, is in the running for an additional floor space of 4.3 lakh square foot. In redevelopment projects of such a scale, tenants are eligible for up to 70 per cent more space than they currently occupy, turning it into a huge windfall for the builder.
One Avighna Park, a project by Nish Developers, is also Mumbai’s first cluster redevelopment project. Official records show that the developer has already approached the BMC for grant of floor space incentives for rehabilitation of 46 commercial tenancies that his firm and aninvestor firm acquired from “non-cooperating” tenants. These tenancies occupy 2.54 lakh square foot. In fact, it was for this project that the BMC sought Advocate General Singh’s opinion. The developers claim that these tenancies had been in existence for over 80 years. Kailash Agarwal of Nish Developers had earlier told The Indian Express.
“Tenants occupying these structures were unwilling to wait for nine-ten years for the redevelopment, and hence offered to surrender their tenancy rights. We invited investors to acquire these through legal means.”
Official records show that almost all tenancies were acquired either by Avighna India, a firm in which Agarwal holds 10 per cent stake, or Assay Developers.The developers have sought that the incentives in lieu of these tenancies be provided as per norms meant for residential rehabilitation. “We could not accomodate all commercial tenements on the ground floor. Moving to a higher floor results causes loss of business. To compensate for this loss, we offered them residential rehabilitation tenements,” Agarwal had earlier told The Indian Express.
Officials have pointed out that the concept of incentive FSI was aimed at ensuring that tenants are not driven out of their homes. Former municipal commissioner Sitaram Kunte had strongly opposed the demand in the One Avighna case. Present commissioner Ajoy Mehta will now have to decide.
Meanwhile, the politics over the proposed move has begun already. Congress MLA Naseem Khan, a former cabiner minister, slammed the proposed move. The NCP’s Nawab Malik said, “Giving FSI perks to builders is highly inappropriate.”