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Welcome move to ease redevelopment

Friday, August 18, 2017

Maharashtra CM Devendra Fadnavis recently stated that smaller societies and complexes can now go in for redevelopment with consent of 51 percent of residents. Ramesh S. Prabhu looks at the possible impact if the move comes into force and other consent numbers

Redevelopment in Mumbai has become a talk of the town with more than 50% of Mumbai occupied with slums, nearly 19,000 cess old tenanted buildings in south Mumbai and all the buildings constructed prior to 1991 in suburban looking for redevelopment. Even in Navi Mumbai, the flats allotted by CIDCO were registered under Maharashtra Apartment Ownership Act, 1970(MAOA).  Different types of redevelopment required different percentage of majority to proceed with redevelopment.

The percentage game
Cess old tenanted buildings require 70% tenants written consent, appointing a particular developer to proceed with redevelopment. A group of tenants  consisting  between 31% to 40% with the support of  developer some time stall the project and therefore, cess buildings redevelopment is not happening in the expected rate.

Slum redevelopment also required 70% consent from  the slum dwellers which has now been reduced to 51% . This has helped the developer having more than 51% to proceed with the process of redevelopment which was not so easy earlier when 70% consent from the slum dwellers was required.

Now private societies require to follow the directions of redevelopment dated 3rd Jan, 2009 issued under section 79A of the Maharashtra Co-operative Societies Act, 1960. According to this direction, 75% of the members should be present in the general body to decide about the resolution to proceed with the redevelopment and more than 75% of the members present should also accept the redevelopment and also give the written consent to appoint a particular developer for redevelopment. Getting 75% of the members attendance is a big task.

Thereafter, selecting a developer with 75% of the members present is also equally a challenging task. No doubt the average percentage of the voting required for the redevelopment works out to 56.25% of the total members ( i.e 75% of 75% = 56.25%).

In the case of Redevelopment of the buildings registered under Maharashtra Apartment Ownership Flats Act, 1970 as each flat owner also becomes the owner for undivided share in the land, the redevelopment requires 100% of the apartment owners' consent. This is practically not possible which leads to further litigation and the process of redevelopment does not start.

In the case of Real Estate (regulation and development ) Act, 2016, any amendment to the plan requires the consent from2/3rd allottees.

51% impact
Considering the above difficulties and anomalies, the government has decided to bring out the necessary amendment in the required laws, to allow the redevelopment of smaller societies and complexes with the consent of 51% of the total units holders. We are of the view that, the 51% of the consent for redevelopment should be made across the board and for all types of redevelopment. This will remove all the confusion and the dream of having housing for all by 2022 may be achieved.  

If the consent is reduced to 51% for all societies, irrespective of number of total members in the society or the housing complex, it shall make the redevelopment much simpler. There also needs to be a separate authority or Real Estate Regulatory Authority should be given additional responsibilities to deal with the disputes in the process of redevelopment or related to the matter of consent. The direction dated 3.1.2009 issued under section 79A of the MCS Act, 1960 has provided the process and procedure for redevelopment but does not have the required provision to resolve the disputes related to redevelopment. One has to move the petition before the civil court or before the Hon’ble High court. This is a much time consuming situation.

(Ramesh S. Prabhu is Chairman, Maharashtra Societies Welfare Association)

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