MUMBAI: In order to discourage builders from blocking or stalling redevelopment of old and dilapidated buildings, the Maharashtra Housing Area Development Authority (Mhada) has increased the annual fees for revalidation of the No Objection Certificate (NOC) from Rs 20,000 to Rs 10 lakh.
The decision has drawn sharp reaction from the builder community which have termed the fee exorbitant and unwarranted. It is applicable to redevelopment of old and dilapidated buildings under section 33(7) and to cluster redevelopment under section 33(9) of the Development Control and Promotion Regulations – 2034.
Sanjeev Jaiswal, chief executive officer and vice-president, Mhada, said there are over 30,000 cessed buildings in island city and this was being done to ensure timely completion of projects as well as revenue for Mhada.
“Often, builders do not carry out redevelopment even after demolishing old building and rather trade the NOC. The full floor space index (FSI) is 3. The 0.5 FSI is at a higher premium and very often the builder will not release rehab tenements even when the Occupation Certificate has been granted,” said Jaiswal.
The decision to hike the fees is also to discourage single building redevelopment which do not help create civic infrastructure for the city, said Jaiswal, adding that Mhada now not only insists on paying rent in advance to tenants for a year but also collection of post-dated cheques from developer for two years.
Advocate Harshul Savla, member of CREDAI-MCHI, a representative body of the real estate industry, said under the new amendments, Mhada can forcibly acquire and redevelop old and dilapidated buildings and there was no need to hike the annual fees from Rs 20,000 to Rs 10 lakh. The decision, he said, will hurt small builders who carry out redevelopment of single buildings.
“Insisting on revalidating the NOC every year is meaningless since the NOC is only about certifying the area to be given to tenants in the rehab building. The building proposals are approved by the BMC,” he said. Savla said the sudden and huge jump in the revalidation fees is unjustified. “A project takes at least five years to complete. The revalidation must be done once in five years. The Chief Fire Officer, too, had hiked processing fees but had to reverse the hike,” he said.
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