Society must step into builder's shoes, complete project: MahaRERA

 30 August 2021

Mumbai

Ganga Jamna Sangam society in Khar (W) was recently formed by 19 flat purchasers who had paid large sums to the builder but were still to get possession of their apartments.

MahaRera Chief Ajoy Mehta’s order said: “The issue or legal validity of termination is not crucial before this authority nor within its scope to adjudicate on its validity. The more important issue...are the implications of the termination and the consequences that follow on the allottees, including the new flat purchasers in the saleable component, the bank and the society at large. It is amply clear that the developer acquired the rights to develop from the development agreement entered upon by the society.”

“The society cannot now by the action of termination wish away the liabilities created by the developer,” it added. The August 21 order further said that on termination, the society becomes the ‘promoter’ and all earlier bona fide liabilities created by the developer would now “squarely rest on the shoulders of the society”.

It added, “The society, thus, cannot now abandon the allottees, including new flat purchasers, on the pretext that the development agreement is terminated. Societies, while appointing developers, must conduct proper due diligence of the development agreement being entered into.

During execution of the project, it should exercise supervision and monitor its progress diligently to ensure that the purpose of appointing the developer is achieved in a timely manner and all bona fide liabilities created in the process are fulfilled.”

It said the society “shall step into the shoes of the respondent (builder)...and ensure smooth completion of the project, safeguarding interests which shall include payment of interest on delayed possession of all present allottees and all new purchasers, if any,...and in no manner jeopardise their interest in terms of their individual rights and interest”.

Six flat purchasers had approached MahaRera complaining that the builder had failed to deliver the flats, and sought compensation with interest. The society, too, filed an intervening application. So did Bank of Baroda, which had loaned the builder for this project. Twelve flats were mortgaged by the builder to the bank.

The bank submitted that there are still 13 unsold apartments on which they have a charge created. Its interest is towards recovery of the outstanding bank dues as the builder did not pay its debts towards the mortgaged loan.

The MahaRera order said the society will have to take necessary legal recourse to recover the interest and other charges. Secondly, the interest of the bank shall be protected and the same shall be taken care of while appointing the new developer by the society.

All the liabilities shall be transferred to the new developer or the said society in case of self-development on ‘as is where is’ basis, it added. “Lastly, the society must ensure that all the liabilities as accruing on date, including the liability of paying interest on delayed possession, all the transactions as on date and all the duties-cum-responsibilities as on date are clearly enumerated,” it said.

McKinsey & Co leases 45,000 sqft office space in Mumbai's BKC

 23 August 2021

Mumbai

Management consulting firm McKinsey & Company has taken 45,000 sqft office space at commercial project Maker Maxity in Mumbai’s Bandra-Kurla Complex (BKC) business district at a monthly rental of Rs 410 per sqft.

The total tenure of the lease will be five years, implying a total rental of nearly Rs 100 crore, said people aware of the matter.

The American multinational has offices in Mumbai, Bengaluru, Gurgaon and Chennai in India.

In the country’s financial capital, it currently operates out of its office at Nariman Point in south Mumbai’s business district.

As per the agreement, the commencement date for the lease is October 1. However, rent payment will start from January 16, 2022, as the consultancy firm will get the benefit of rent-free three months and 15 days.

The agreement has a clause for 5% rent escalation every year from the lease commencement date, unlike usual rental reset at every three years, showed the documents accessed by ET through CRE Matrix, a real estate data analytics firm.

According to McKinsey, its office in Mumbai will soon have an additional address, which in form and function will be aligned to the changing needs of its operations.

“We envision this space to be a truly modern facility defined by an optimised and multipurpose use of space, in line with our hybrid working model and sustainability focus – a workplace of the future. We will continue to retain the 21st floor of our existing office at Express Towers in Nariman Point,” McKinsey said in response to ET’s query.

McKinsey has leased the space in BKC through its India operations. The leased office space is spread across four floors of 1 North Avenue tower of the integrated development, which has a total of five office towers, an under-development luxury mall and drive-in theatre.

While the project, which is strategically located at the beginning of BKC business district, has been developed by Maker Group, it has been strata sold and the ownership of these offices is with several investors and property firms.

McKinsey has leased this office space from two separate entities – Golden Bay Properties and Neelammegha Investments & Trading Co. The consulting firm will pay a security deposit worth 10 times the initial rent amount.

Golden Bay Properties and Neelammegha Investments & Trading Co could not be reached for comment.

Office spaces across India are being expanded as organisations are planning a cautious return to offices for their employees. Several large companies are expanding office spaces to make social distancing adjustments.

Social networking firm Facebook recently leased 90,000 sqft office space at commercial tower One BKC in the business district through renewal and new lease agreements with Blackstone Group.

Mumbai: SRA builders beat pandemic blues with record project nods in two years

 23 August 2021

Mumbai

Builders executing redevelopment projects under the Slum Rehabilitation Authority (SRA) have beaten the pandemic blues.

While a record number of approvals for SRA projects were given between March 2019 and April 2021, the highest number of projects were completed too during this period.

According to data from the SRA, 516 Letters of Intent (LoIs) were issued between March 2019 and April 2021, including those that were re-issued as they were stuck for a long time and 82 new ones. In the period from April 2017 to March 2019, 184 LoIs were issued. A builder can begin redevelopment of a slum plot only after an LoI is issued by the agency.

“We have not just issued fresh LoIs, but also issued revised LoIs in several cases where projects were stuck and have fast-tracked procedures in the SRA,” Satish Lokhande, SRA CEO, said. “The aim is to ensure that the maximum number of slumdwellers are rehabilitated as soon as possible. We are bringing in several changes to facilitate this,” he added.

In December 2020, the agency began sending notices to developers who have failed to start their projects even after getting requisite clearances.

Between March 2019 and April 2021, the SRA issued occupation certificates to 28,162 slum rehabilitation units—8,602 in 2019-20, 13,875 in 2020-21 and 5,685 in April 2021. In the period from April 2017 to March 2019, 26,422 OCs were granted. Once an OC is given, the project is deemed to be completed and original tenants can move into the new units.

Housing Minister Jitendra Awhad had recently said that he was pushing to fast-track SRA projects and that the agency would take over projects where the developer has failed to rehabilitate the slumdwellers. “The SRA plans to take over all projects which are at standstill and have taken big fat loans from financial institutions and left the poor on the streets. The very aim is to give homes to the poor and pump in money for SRA. Just having LoI does not make u the owner of the property,” he had tweeted.

According to the data, between March 2019 and April 2021, nearly 2 lakh slum tenements were sanctioned of which 48,104 were okayed in 2021 alone. Between April 2017 and March 2019, only 53,409 slum tenements were sanctioned.

Around 2.1 lakh families have got new apartments in the 23 years since the SRA was set up. According to SRA estimates, there are 12.5 lakh slums in Mumbai housing 62 lakh people. In December 2020, the state government had set up a 10-member committee to ensure speedy disposal of complaints pending with the SRA, including cases of corruption and red-tapism. According to officials, projects are stuck for various reasons, including lack of funds or complaints by tenants against the builder. According to estimates, one lakh slumdwellers are affected by the “dead” SRA projects.

Maharashtra: Housing e-registration pilot project likely next month

 20 August 2021

Mumbai

A pilot project for the state to usher in e-registration for housing projects listed under MahaRERA will commence from mid-September, ahead of the actual roll-out from October 1, Inspector-General of registration and stamps Shravan Hardikar said in Pune on August 19.

The registration department is getting ready by ensuring that maximum developers are enrolled under the process and they have reached out to the builders’ association ahead of commencement of the pilot project.

Hardikar told TOI that an app was being readied for the pilot project. “Over 100 developers have carried out e-registration of over 346 projects across the state. The e-registration process will enable sale and purchase of housing projects, so buyers and sellers will no longer have to visit registration offices. We will first roll out the pilot project in the third week of September. After this, we will enable all developers registered under MahaRERA to carry out the process from their offices,” he said.

Revenue Minister Balasaheb Thorat had told TOI in June that the e-registration process was among initiatives planned to streamline work, especially during the pandemic, and reduce footfall at the registration offices.

A registration department official said the process was being implemented on a small scale. “Now, with this being mandatory from October 1, the registration department is ensuring that the software is being prepared by the middle of next month,” the official said.

The pilot project is being carried out first to ensure that ahead of its actual roll-out, the app is being tested and there are no technical glitches. “The proof of the concept will be ready ahead of the pilot project. The process will also be decided and will cite the criteria, such as categorising developers with 100 or more flats, and 50 or more flats, and go ahead with the registration process in phases,” Hardikar said.

Another official said, “The e-registration process can continue even at the time of the pandemic-induced restrictions. This will ensure that the real estate market does not get affected.”

Confederation of Real Estate Developers Association of India (Credai) Chairman Satish Magar, who was among the first developers to register his projects in Nanded city with the earlier software, said, “Maharashtra is among the frontrunners to introduce such concepts.”


State Credai President Sunil Furde said the developers’ body has been favouring a software that would ease registration and ensure transparency. “We are looking forward to this initiative and members have been briefed about it,” he said.

Thane civic body acts on unauthorised constructions in Majiwada-Manpada ward

 19 August 2021

Mumbai

The Thane Municipal Corporation (TMC) on August 17 took action on unauthorised constructions as well as illegally parked vehicles.

The civic body said that the action was taken on illegal constructions in Majiwada-Manpada ward.

A ground floor plus columns of two floors were demolished in Balkum village.

In Wagbhil, the action was taken on the fifth floor of the stilt plus five-storey building. Similar actions were taken in Koliwada and Kasarwadavli too.

Apart from that, action was taken on vehicles that were illegally parked below the flyover in Majiwada. Whereas, the banners and posters on the main road were also removed.

For over a month, the TMC has been taking action on illegal constructions in the city.

Government cuts non-development zone around Thane Creek Flamingo Sanctuary

 18 August 2021

Mumbai

The Union ministry of environment and forests on August 17 accepted the state government’s recommendation to reduce the 10km buffer zone from the boundary of the eco-sensitive Thane Creek Flamingo Sanctuary to 3.89km.

This comes as a major relief to builders in the Mumbai Metropolitan Region as hundreds of construction projects would have been affected by the no-development rule.

“We are happy to inform you that the flamingo buffer zone is approved with small exclusions as recommended by the state in the meeting," said CREDAI-MCHI, which represents developers.

Its President Deepak Goradia told TOI that the ministry on August 17 agreed to reduce the buffer zone and that the official notification will be issued by the ministry later.

On July 31, TOI had reported that projects in as many as 15 wards in Greater Mumbai would have been affected because of the 10-km buffer zone.

PAG extends $100 million debt to Kalpataru's two realty projects

 18 August 2021

One of these projects is a mixed-use development with residential and commercial components in Thane, while the other project is residential development in Mulund suburb of Mumbai. Both the developments including the first phase of Thane project have a total 1.8 million sq ft saleable area.

Global alternative investment firm PAG has entered into an agreement to extend debt worth $100 million or over Rs 743 crore to two projects of realty developer Kalpataru, said persons with direct knowledge of the development.

One of these projects is a mixed-use development with residential and commercial components in Thane, while the other project is residential development in Mulund suburb of Mumbai. Both the developments including the first phase of Thane project have a total 1.8 million sq ft saleable area.

“Part of the funds to be received from PAG will be used for repayment of an existing loan and the balance amount will be utilised to support completion of both the projects,” said one of the persons mentioned above.

PAG, Kalpataru and transaction advisor Cushman & Wakefield declined to comment for the story.

In May, ASK Property Investment Advisors (ASK PIA), the real estate private equity arm of the ASK Group, invested Rs 200 crore in realty developer Kalpataru’s mid-income housing project in Baner locality of Pune.

PAG is a leading Asia-focused private investment manager, with strategies including private equity, private debt, real estate and hedge funds. In May, the private equity firm invested Rs 175 crore realty developer Century Real Estate’s residential project spread over 7 acres in north Bangalore.