Maharashtra Housing and Area Development (MHADA) (Amendment) Act 2020, which was signed by President of India Droupadi Murmu’s Office on December 2, is being touted as a process that will pave the way for redevelopment of cess buildings. However, experts are of mixed opinions with some saying the act does not protect the tenants while others say it would give a push to projects that have been stalled for a substantial period.
Experts casting doubts over the act called it a gateway for builders to take over the cessed buildings.
Singling out a provision of the law that stated that tenants could take over the redevelopment work provided the compensation is paid to the owner by the cooperative housing society led by the former, an expert asked where the money for the same would come from.
Citing an example, the expert, who did not wish to be named, said, “A Girgaum cess building has 100 tenants. To accommodate them, the developer will require 45,000 sq ft for sale. As opposed to this, the total sale available to the builder will be 65,000 sq ft. Now, 15 per cent of 65,000 sq ft of carpet area makes it about 12,000 sq ft of saleable area. In Girgaon, the selling price is Rs 55,000 per sq ft and once multiplied by 12,000 sq ft of saleable area, it becomes Rs 65 crore. This means the 100 tenants will have to shell out Rs 65 lakh each if they want to carry out redevelopment. Where will these tenants get this kind of money from?”
On the possibility of MHADA taking over the development, the experts asked how the authority would arrange the money when it lacks funds to carry out repairs on the cess buildings.
On the other hand, Vinod Sampat, founder and president of the Flat Users Residents Welfare Association, said the new law will enable redevelopment of cess buildings. “The redevelopment would generate houses at affordable prices. Also, the new law will make landlords act quickly since they will lose the redevelopment project otherwise. Similarly, tenants will also have to carry out redevelopment within a given time period otherwise, MHADA will take over the project. This law brings in some movement with regards to cess building redevelopment,” Sampat said.
Expedite redevelopment work, say tenants of suburb non-cess buildings
Tenants of non-cess buildings, also called as private Pagadi owners, have demanded for a provision under law to expedite the redevelopment of their non-cess buildings as well.
Dharmendra Vyas, treasurer of Pagadi Bhadut Sanghatana, a registered association of residents from C1 buildings, said that there was no provision for alternate houses in non-cess buildings.
Vyas said that the condition that required getting a no-objection certificate from the landlord for repair work should be removed.
In suburban Mumbai, there are about 16,000 non cess buildings, which are over 30 years old.