MUMBAI - REDEVELOPMENT OF OLD, CESSED BUILDING THROUGH PRIVATE DEVELOPERS As the pace of reconstruction of cessed buildings by MBRRB was

found to be not sufficient so as to cover the entire cessed buildings in the Island City of Mumbai, it was felt by the Govt. that the pace of redevelopment could be increased with the involvement of tenants/landlords/private developers. With this in view, the State Govt. introduced the policy of giving FSI 2.00 for redevelopment of cessed buildings in the year 1984. In the year 1991, the Govt framed the Development Control Regulations for Mumbai. Under these Regulations, the Rule no. 33(7) was formed for redevelopment of cessed buildings in the Island City of Mumbai and the provisions of the policy of 1984 were incorporated in it. However, there was no encouraging response to this scheme from the tenants/landlords. Hence, the Govt. formed a Committee under the Chairmanship of Shri Sukhtankar to overview the implementation of the scheme. On the submission of the Report of the Sukhtankar Committee, the Govt. in the year 1999 amended the Development Control Regulation 33(7). The brief highlights of the amended Development Control Regulation 33(7) are as follows: In case of redevelopment of 'A' category cessed buildings (constructed before 1940) undertaken by the landlord or Cooperative Housing societies of landlord or occupiers, the total FSI shall be 2.5 of the gross plot area, or the FSI required for rehabilitation of existing occupiers plus 50% incentive FSI, whichever is higher. Under the new policy the developer is assured of at least 50% FSI for free sale. Also the policy enables rehabilitation of all occupants on the same plot, reducing social dislocation. Self contained flats of minimum 225 sq.ft. and maximum 753 sq.ft. carpet area are given to the old residential tenants/occupants. Shopkeepers are given an area equivalent to their old area. In case of 'B' category cessed buildings permissible FSI shall be the FSI required for rehabilitation of existing occupiers plus 50% incentive FSI. As per the permissible FSI, stated above, will depend upon the number of occupiers and the actual area occupied by them, no new tenancy created after 13.06.1996 shall be taken into account, while computing the permissible FSI. Similarly, tenants in unauthorized constructions made in the cessed buildings shall not be taken into account while computing permissible FSI, i.e. the total no. of tenants/occupants should not increase after 13.06.1996. The responsibility for rehousing such tenants whose tenancy may have been created after 13.06.96 or who stay in unauthorized construction will lie solely with the NOC holder.

Though some buildings may belong to 'C' category (may not belong to 'A' or B' categories), they may be so dilapidated and dangerous that their reconstruction is most urgently necessary to this end, the Government has granted additional incentive FSI as per Point No.1 above for redevelopment of buildings of any category declared as dangerous, prior to monsoon of 1997. A large number of old properties can be better developed by clubbing them together instead of developing each property separately. This leads to lesser congestion and better infrastructure such as internal roads, open spaces, etc. To encourage the composite redevelopment of several cessed properties together, the Government has granted additional incentive FSI for composite redevelopment. The additional incentives in FSI for joint redevelopment of A, B or C category cessed buildings on two or more plots are as follows: No. of plots proposed for composite redevelopment FSI permissible a) One plot. 2.5 or FSI required for rehabilitation of occupiers plus 50% incentive FSI whichever is higher. b) 2 to 5 plots. 2.5 or FSI required for rehabilitation of occupiers plus 60% incentive FSI whichever is higher. c) 6 or more plots. 2.5 or FSI required for rehabilitation of occupiers plus 70% incentive FSI whichever is higher. In some cases, it may not be possible to utilize the entire permissible FSI on the same plot, because of height restrictions, fire-safety regulations, etc. In such cases, the NOC holder is entitled to avail the benefit of Transferable Development Rights (TDR), to be used in the suburbs or extended suburbs in accordance with the relevant regulations of DCR 1991, for Greater Mumbai. This provision ensures that the scheme remains feasible even where the incentive FSI cannot be fully utilized on the same plot. In case of Heritage buildings in Grade III and precincts, no permission of the Municipal Commissioner or Heritage Conservation Committee is now necessary, if the height of the buildings does not exceed 24 meters (excluding stilt). All these modifications and incentives mentioned in Government gazette notification dated 25.01.1999 will not be applicable to the areas which are affected by the Coastal Regulation Zone (CRZ) notification issued by Ministry of Environment and Forest, Government of India vide notification dated 19th February 1991, and orders issued from time to time.* For the latest update on the CRZ laws (2011), please refer attached PDF file (CRZ-Notification-2011.pdf Page #12) CRZ areas falling within municipal limits of the Greater Mumbai. AND the attached PDF file (om_020711.pdf)

of the Office Memorandum of Maharashtra Coastal Zone Management Authority Page #3 Para 5) The surplus Built-up area is to be surrendered to M.B.R & R. Board as per Schedule -III of MHADA Act 1976. Note: As per Govt. G.R. dt. 2-3-2009, minimum carpet area admissible is 300 sq. ft. in lieu of 225 sq. ft Old Building Redevelopment Rules & Redevelopment Regulations: STAGES OF REDEVELOPMENT 1. Offer letter to the society 2. Terms and conditions with the society 3. Agreement with the society 4. Sanction from MCGM in favour of the society 5. Loading of TDR in the societys name 6. Obtaining the IOD 7. Shifting of the members 8. Demolition of the building 9. Obtaining the CC 10. Construction of the new building 11. Obtaining the OC 12. Shifting the old members Offer letter to the society: The Housing Society is required to advertize in 2 leading news papers inviting the sealed tenders from the Developers and a Redevelopment Committee is formed to shortlist atleast 3 Developers on merits and the comparative data is placed before the SPGM for final selection. The selected Developer is informed accordingly and his terms are invited in writing as an Offer letter to the society Terms and conditions with the society: The first step towards the re-development is agreeing on the basic terms and conditions between the members and the Developer. The

broad terms and conditions will include extra area, corpus money, shifting charges, alternate accommodation, time of re-development, amenities in the new building, etc. Finalizing the plans with members: After due consultation with all the members, the plan will be made to suit the requirements of the existing members and will be approved by them before applying for sanction from MCGM Agreement with the society: The execution of the development agreement will be done once the above two points have been cleared by both the parties and after the draft copy of the agreement have been approved by the solicitors of both the parties. It is possible to appoint a common solicitor so as to reduce the time in execution of the document Sanction from MCGM in favour of the society: After the execution of the development agreement, plans are put up for sanction from MCGM with regards to the entire layout as well as the concession plans in favour of TWO FSI (i.e. plot area + TDR purchased from open market). This step makes the society feel safe and confident towards the Develop Loading of TDR in favour of the society: On receipt of the plans from MCGM approving the loading of TDR, the Developer will purchase the TDR from the open market in the name of the society and get the same deducted and loaded from MCGM. This step is taken with the intention of making the society feel secure about the entire development process Obtaining the IOD: After the TDR is loaded, the IOD is obtained from the MCGM, the Developer then starts fulfilling all the conditions as mentioned in the IOD before obtaining the Commence Certificat Shifting of the members: The members will feel lot more confident after the IOD is been obtained from the MCGM towards the entire development of TWO FSI. The members will now shift into their alternate accommodation as a pre-requisite before demolition of the building which is a must before obtaining the CC from MCGM Demolition of the building: Once the members have shifted into their alternate accommodation, the demolition of the building will take place either all the wings simultaneously or phase wise depending upon the scheme of re-development. Usually about three months are given to the members from the date of execution of the development agreement before asking them to shift to the alternate accommodation Obtaining the CC: The IOD approval and demolition of the building will be followed by the issue of the CC (plinth level) by the MCGM which shall enable the Developer to start the construction work and after the plinth lines are verified by the MCGM officers, the further CC is granted for the complete building Construction of the building: The building construction work will began in full earnest as per the approved plans by the MCGM taking into consideration the various safety factors to be considered during the construction work. The quality and the amenities will be provided as per agreed terms and conditions

Obtaining the OC: The last step before the construction work is termed as complete is obtaining the Occupation Certificate enabling the Developer to allot the occupation to the old as well as the new member Shifting the old members: On receipt of the Occupancy Certificate the Developer can lawfully allow the possession of the flats to be taken over by their owners DUTIES AND FUNCTIONS OF THE DEVELOPER 1. The Developer to demolish the building existing in the plot and construct new multi storied buildings taking into account the earthquake resistant factors as directed by The Municipal Corporation of Greater Mumbai. The new building should have stilt for car parking and should consist of _____ stories as per approved plans. The final plans are to be prepared after due consultation with the managing committee and understanding their requirements. 2. The Developer shall be responsible to obtain all the necessary approvals from The Municipal Corporation of Greater Mumbai and all other statutory and Government offices and departments which will include: 1.Development Planning Remark or Town Planning Remark: MCGM (Dev. Dept.) 2. Survey of the entire plot with regards to the area and topography of the plot, existing plot boundary and existing structures (Developers Architect) 3.Intimation of Disapproval (IOD): MCGM 4.Property Tax Assessment NOC: MCGM (Assessment Department) 5.Hydraulic Engineer No Objection Certificate: MCGM (Hydraulic Department) 6.Storm Water Drainage No Objection Certificate: MCGM 7.Sewerage No Objection Certificate: MCGM 8.Traffic Deptt. of Municipal Corporation of Greater Mumbai No Objection Certificate: MCGM 9.Urban Land Ceiling NOC: Competent Authority in Collector's

Office 10. Tree No Objection Certificate: MCGM (Tree Authority) 11.Non-Agricultural Permission: Collector's Office 12.Civil Aviation No Objection Certificate: Airport Authority of India 13.Pest Control No Objection Certificate: MCGM (PCO) 14.MTNL No Objection Certificate: MTNL 15.Chief Fire Officer's No Objection Certificate: Fire Department Office 16.Commencement Certificate: MCGM 17. Lift Inspection No Objection Certificate:Inspector of Lifts, PW 18. Occupation Certificate (OC):MCGM 19.Water Connection Certificate under section 270A:MCGM 20.Drainage Completion Certificate:MCGM (Water Department) 21.Building Completion Certificate (BCC):MCGM 22.TDR Loading:MCGM 23.Building Demolition Work:Contractor appointed for demolition work 24.Soil Testing Report:The Concerned Laboratory Please ensure to collect all the listed certificates from the Developer/Developer as the same must be with the custody of the Housing Society once the redevelopment of the property is completed and the occupancy certificate is issued by MCGM to rehouse the members. 3. The Developer should provide the following infrastructure after the completion of the redevelopment work: a. Complete paving around the building finished with suitable materials b. Storm Water Drain

c. Sewerage lines d. Security arrangements e. Garden and landscaping (wherever possible) f. Pipe gas line (as per availability) g. Internet facility (as per availability) h. Society office i. Adequate car parking spaces The Developer has to provide extra areaover and above the existing carpet area to all the members free of cost in the newly constructed building. The flower bed as open balcony area should be provided as permitted by The Municipal Corporation of Greater Mumbai. (Area will be approx sq.fts.) 4.The Developer should pay the society/individual member, a corpus fund of Rs..towards granting of development rights. The above amount is helpful in paying all outgoings of the existing members in the newly constructed flats. The corpus amount is worked out on the basis of Rs..per sq.fts on the existing carpet area. 5.The Developer should provide displacement compensation towards temporary alternate accommodation to the affected members during the construction work at the rate of Rs per sq.ftson the existing carpet area. The compensation has to be paid from the time the vacant possession is given by the members for demolition till the construction of the new building/s is/are complete and the peaceful possession of the new flats given by the Developer. 6.The society shall accept and admit the prospective/additional flat owners of the newly constructed building/s as members of the society and treat them at par with existing members. 7.The Developer should prepare a tentative layout of the new building which has to be shown to the members as and when required. 8.The Developer may tie up with leading financial institutions and banks and arrange for necessary approvals for housing loans for the existing members and prospective clients. 9.The Developer should complete the entire re-development work within a period of ___ months or as agreed with the Society after all the legal formalities and Municipal approvals are obtained. The initial Municipal approvals will take about three months depending upon the existing rules and regulations governing the re-development work.

STANDARD LIST OF AMEMITIES Structure:The structure would be designed as Multi Frame Structure of RRC with provisions of Earth Quake resistance features. Elevation and Planning:Exquisitely designed elevation features may be provided along with careful and detailed planning with plenty of light and ventilation in each rooms and minimum wastage space with proper co-ordination of all rooms. The building may be provided with sand faced plaster on the external face water proofing plaster and chicken mesh should be used as required Entrance Lobby:The entrance lobby may be elegantly designed with Granite tile and POP false ceiling. Doors: All the doors should be provided with Marine Flush Doors and CP frame with cover mouldings. The main door must be provided with good quality night latch, safety chain, tower blot and attractive handle. Internal doors may be provided by cylindrical mortise type locks. Windows:All the windows of rooms and toilets should be provided with marbles frames with designed mouldings. Heavy section powered aluminum sliding windows with 5 mm tinted glass may be provided with imported bearings and fittings. Plaster of Paris:Beautifully designed cornice has to be provided in living room. Walls of all the rooms to be finished with POP panning and grooves to be provided on top of the skirting Electric work:All the electric wiring work must be done as per the norms of Reliance Energy using 1/18, 3/20, and 7/20 flexible wires with use of MCB and ELCB for safety of the flat owners. Latest available switches of reputed company must be provided. Extensive electric layout comprising of the following points to be provided: Spot Lights (living room and bed room) Tube lights Fans A.C. (living room and bed room) Geysers Exhaust fans

Aqua guard Mixers Washing machine Refrigerator T.V. cable Gas pipe line (if available) Refrigerator T.V. cable Gas pipe line (if available) Plumbing:All the plumbing pipes, fixtures and fittings should be strictly as per IS Norms. CP plumbing fixtures (ESS ESS or JAGUAR) should be be provided in all toilets with matching sanitary ware of reputed company. Plumbing points should comprise of wall mixtures, showers, taps, washing machines and aqua guard. Flooring and Tiling: Marble or granite or granite flooring should be provided with matching skirting of 3. Toilets should have full dado height of coloured glaze tiles of reputed company of Indian or imported make with designer borders and motifs. Kitchen:Granite kitchen platform comprising of cooking and serving platforms may be provided with moulded facia patti and vertical sides. Stainless steel sink has to be provided. Colour:The entire flat should be painted with Synthetic enamel paint including doors and ceilings. The external walls of the buildings must be painted with good quality cement paint. Lift:Lift of OTIS/Johnson make may be provided with all the safety features. Terrace: The terrace should be finished with china chips and high parapet wall with corner lights and water points. Compound wall and gates: New compound wall should be constructed with proper design and sufficient electric points.

REDEVELOPMENT PROCESS

1) Documents Required by the society : Conveyance deed Society Registration Certificate General Body Resolution to go for redevelopment. List of member with their respective carpet areas C.T.S. plan & property card for the plot. D.P. remarks, If the property is under TPS scheme then T.P. remarks Copy of municipal approval plans 2) Importance of Project Management Consultant in Redevelopment A consultant is basically a team of Architects, Civil Engineers and Legal Advisors. An Architect is required to prepare financial feasibility of project, Technical Analysis of offers of developers, verifications of building plans prepared by the developers, preparation of schedule of municipal process with developer. A civil Engineer is required to cross check R.C.C. drawings of the proposed building and check onsite quality of the construction. Legal Advisor is required to prepare development agreement and individual MOFA agreements of society members of developers and check other legal aspects of the proposal. 3) Edifice in the field of Re-development Edifice is well equipped with team of experienced architects, civil engineers and legal Advisors. After working for so many years in the field of building Constructions, Reconstructions, designs and municipal approvals, we are well acquainted with development rules and regulations of M.C.G.M. and hence very well know how the maximum plot potential and benefits a developer can avail from any plot. Using that knowledge we guide society through entire process of redevelopment so that the members can get the maximum benefits from the builder and at any stage of redevelopment members do not get cheated by the developer. Our team of structural Engineers keeps check on the construction work and ensures the better quality of construction from the developer. 4) How can WE help society in Process of Redevelopment Carring out structural Audit To ensure redevelopment Passing general body resolution for redevelopment should be passed in AGM to go for redevelopment. At least 15% members consent is required to start the process of redevelopment at the time of final decision 75% members consent is required

Preparation of financial feasibility report. A feasibility report shall be prepared by studying existing building plans, consumed FSI, carpet area of existing members & available TDR/ additional FSI benefits. A report will be submitted by the society stating in the maximum benefits the members can demand from the developers. Preparation of tender to invite offers from developers. Preparation of Tender document, "Tender" is a crucial document, which is to be designed meticulously to avoid any kind of misunderstanding/argument during the course of project. It shall contain an agreement, various information's to bidder, technical specifications, general conditions, and detailed specifications which makes it easier to evaluate the offers received since they are given on the same base Preparation of comparative chart of developers. A chart showing the comparative analysis of all the offers shall be prepared to Get the idea of the best offer received. Ranking shall be given to developers. Finalization of developer on the basis of report given by the consultant. On the basis of ranking , the projects carried out by the developers shall be Inspected , their market reputation shall be checked and accordingly the best developer shall be recommended to the society. Preparation of development agreement While preparation of development agreement between society and developer inputs shall be given in terms of technical clauses which would Safe guard the interest of the society and safety of the project . Finalization of building plans The plans of proposed building prepared by the developers shall be verified in respect of planning , carpet area , area calculations, legalization and authorization of the area allotted to the members. Vacating the building after the builder obtains the necessary permission. The care is taken that the necessary permissions are obtained and legal formalities are fulfilled to secure the project by the developer before he ask the members to vacant the premises. So that the project doesn't stuck up after demolition of the building.

Demolition and reconstruction of building. After demolition and during construction of building the regular inspection is carried out to check the quality and speed of the construction. Possession and occupation of building. During construction of building co- ordination with the developer shall be done to see that all the formalities for the occupation of the building are fulfilled and members get possession with the occupation certificate.

Basic concepts of property re-development in Mumbai By Gaurang Damani (September 2010) Many buildings are so old and un-repairable, that the only solution is to reconstruct them. If you wish to make re-development profitable for everybody, knowledge of the rules is important. Landlord or Society can re-develop the property themselves, but as it is complicated, most generally appoint a developer. The occupants must take care of the following factors, while signing the agreement (no interim document must be signed): Precise details on carpet area (because developer may mention super built up area, including flower bed, niche area etc., rather than carpet area.) Temporary accommodation details (including who will pay for flat deposit) Stringent penalty clauses for delayed delivery Provision for corpus fund - this can take care of maintenance and the increased property tax after re-development and re-assessment. Corpus fund must be deposited when property is vacated, so its interest can start immediately. Payment of higher tariff electricity bill/ water charges during part OC Amenities clearly specified, like parking; Mahanagar gas connection; pest control during construction; branded electrical, kitchen, furniture and plumbing fittings; window grills; type of paint/ tiles etc. to be used. Other amenities can be asked for, like stand-by generator; solar water heater; separate water lines for flushing and kitchen; Rain water harvesting etc. Forming resident's society within specified period of 12 months or as agreed in the agreement terms Arbitration details, in case of a dispute. Sharing of gains due to extra FSI, if policy changes Construction quality. Hence constant watch on quality of construction must be done. If there is any discrepancy, MHADA must be notified immediately.

Helpline number, once property is handed over to the society. Checking of agreement by occupant's advocate, because once signed, there is nothing in the occupant's hands. Occupants must also obtain the following documents from the developer: Performance guarantee from the developer, This may include the "Defect liability period" of 24 months, which will start after OC Water proofing guarantee for atleast 10 years after OC. Bank guarantee from the developer, upto 20% of the price of the re-development project, including corpus fund, rent amount etc. Financial statements including latest IT returns and PAN number Bank solvency certificate from developer All relevant insurances like project insurance/ 3rd party/ labour insurance etc. Undertaking to submit regular progress reports, which must match original work schedule till BCC (Building completion certificate) Bio-data of key personnel who would be handling the project. Copy of license from government agencies Work contract sales tax number ESIC and PF registration details Occupants have to give a 'Power of Attorney' to the developer, for various co-ordination with the government agencies. After BCC, this PoA must be cancelled. The developer would directly submit the proposal to the board with the following documents: BMC's latest cess category certificate Repair cess and Property tax bills BMC certificate showing upto date payment of cess. Conveyance deed Lease agreements Latest property card

Index II Society registration certificate Latest true extract from cadestral survey sheet List of occupants as duly certified by the Executive Engineer of the local BMC ward office. Latest DP remarks (CRZ/ NA order etc.) Irrevocable written consent by individual occupants, undertaking to shift to temporary accommodation, etc. Plan of proposed building Affidavit cum Undertaking and Indemnity bond by developer, as per above rules And other documents as applicable to the scheme Stages of development: NOC issued by MHADA (work has to start within 12 months from date of issue of NOC) Rehab of old occupants has to be completed within 30 months from issue of NOC Part OC (Occupation certificate) for housing old occupants Full OC, only after all the old occupants have been housed in reconstructed building (Mumbai Building Repairs and Reconstruction Board) MBRRB's has issued guidelines for Landlords, Developers and Tenants/ Occupants for re-development under DCR 33(7): Any property on which cess (tax) is charged for its repairs and maintenance by MBRRB, is called a cess property, and is eligible for re-development. Consent of atleast 70% occupants required for re-development Proposed minimum carpet area to be given to tenant is 300 sq ft and maximum is 753 sq ft. So for eg., if a tenant has 500 sq ft, then he can get the same area that he currently has. Non-residential occupants would get same area as before. New tenancy created after 13/6/1996, is not considered for redevelopment benefits. PITFALLS of re-development: The new members may have to bear an increased maintenance cost and also increased property taxes. Also, till the Occupation certificate (OC) is not procured, they end up paying higher BMC and water/ sewage charges. Other relevant information:

Categories of cess buildings are as: {Category 'A' - construction prior to 1/9/1940; 'B' between 1940-1951; 'C' - after 1/1/1951} For category 'A', applicable FSI is 2.5 or 50% incentive over rehab FSI, whichever is greater. So developer is assured of atleast 50% FSI for free sale. 20% of incentive FSI can be used for non-residential purposes. Under DCR 33(9), Cluster development is possible for mix of structures with minimum plot area of 4,000 sq mt. Applicable FSI is 4 (or) required FSI plus incentive FSI of 5075%, depending on size of the plot. If the developer cannot use the FSI on the same plot, then he can use the balance as TDR (Transferable Development Rights), in the suburbs This document is to be used as a guideline only, and is not a replacement for legal opinion.