Can I fight for 300 square meters of carpet area and secondly for the use of rent until the renovation is completed. Citizen representatives explained that attractive incentives make redevelopment a win-win situation for everyone, as residents get larger homes and owners/developers are encouraged to get involved in projects to make good profits. One planner said the incentives will help generate more housing in the city and provide more open space and amenities, as well as control rising housing stock prices. The rules further state that tenants have the right to get more space than they currently occupy, the minimum area is 300 m² and a maximum of 1,292 m² free of charge. If their area exceeds the upper maximum limit, the tenant must pay the construction costs of the additional area to the landowner. In fact, the low rents charged under this Pagdi system are very often blamed for the lack of repairs and maintenance of dilapidated buildings. This system was also more favourable because it was not covered by tax laws. But with the new GST law, the Pagdi system will be introduced in the area of services. The rent premium obtained upon the transfer of rental rights invites GST to grant the exemption provided for by Sl.Nr.12 of Communication No. 12/2017 of the central tax (rate) of 28 June 2017 on “Services provided by the rental of residential property for residential use”.
In the city, there are rules on the minimum carpet area for these tenants, while for suburban areas, tenants are only entitled to the predominant inhabited area. In addition, the renovation of covered buildings in Mumbai is mainly carried out according to DC. By-law No. 33 (7), under which tenants become owners, while suburban landlords are not required to offer tenants ownership of renovated buildings and may retain them as tenants. In 2019, the Government of Maharashtra allowed developers willing to undertake the redevelopment of Pagdi plots an Additional Floor Area Index (FSI) at a discounted price. However, this would result in a loss of about 50% of revenue for the Brihanmumbai Municipal Corporation (BMC) and a final decision on this issue is still pending. The 2018 BMC guidelines stated that those already living in buildings not housed prior to June 13, 1996 will be eligible for new housing if the property is renovated. Even if the tenant had officially and legally transferred ownership to the new tenant, the new tenant would be entitled to the same benefits. Mumbai Development Control and Promotion Regulations 2034- 33(7)(A) – Reconstruction or rehabilitation of existing dilapidated/hazardous rental buildings in suburbs and extended suburbs and existing non-tenant buildings permitted in the City of Mumbai. It only means that the Pagdi system is unable to balance the needs of landlords and tenants in today`s society and is outdated, requiring appropriate changes to this rental system to meet the needs of the new world or will be abolished altogether.
After rehabilitating existing residents, the developer uses the additional FSI to build more apartments for sale to cover costs and make a profit. The new regulation further states that if companies paid a premium for stair hall and elevator areas during construction, they will not have to pay it again during the renovation. For example, in the Pagdi system, if a current tenant wants to sell his/her house for Rs.10 lakh, he/she is obliged to pay between 3 and 5 lakhs to the landlord. Of course, he has limited rights, as the landlord collects the nominal rent and issues receipts accordingly. The amended Development Control Rules (DCR) approved by the state government last January grant 35% compensatory floor area index (FSI) for the rehabilitation component of the rehabilitation project free of charge. However, it is not known whether the builder or owner of the apartment will have to pay for the extra space. In the Pagdi system, the only distinguishing feature is that the tenant becomes co-owner of the premises and not of the land. This tenant continues to pay rent to the landlord as long as he does not sublet the premises. In addition, the tenant has the choice to sell said property, however, the tenant must give the owner a percentage (between 30 and 50%) of the gross amount of sales.
A new qualification is added to clause 33 (7) (A) (b) further providing that in the case of a renovation of a complex, as carried out in subparagraphs (a) and (b) above for two or more but not more than five parcels of buildings occupied by tenants, the FSI incentive is 60% and the user is entitled to 8% additional area of refurbishment mats and six or more for the parcels, Then the incentive is 70% and the user is entitled to 12% additional rehabilitation carpet area. The government is actively pushing for the rehabilitation of entire clusters of old buildings, particularly in South Mumbai, as this appears to be the only way to rehabilitate prime tenant-occupied properties under the Pagdi system. New laws and regulations have streamlined the Pagdi system by incorporating the structure of this rental into its herd and trying to restructure the process and most of the problems arising from this system. Some of these are discussed below: The “pagdi-kirayedar” system was introduced in the pre-independence period to avoid taxes paid to the British government. In this system, oral/verbal agreements played an important role in the transfer of ownership, with tenants receiving a receipt for rent paid and other tenants making full payments to the landlord. Disputes between landlords and tenants are one of the main reasons for delays in the cluster`s redevelopment process, where entire places like Bhendi Bazaar are being rehabilitated. The Mumbai Development Control and Promotion Regulations 2034 (DCPR) offer attractive incentives to owners of these buildings to encourage them to redevelop their properties. These incentives are granted on the basis of the total area needed for the rehabilitation of residents.
The rule further states that tenants are entitled to a minimum square footage of 300 square feet and a maximum area of 1,292 square feet, free of charge. If the area of the land exceeds the maximum upper limit, the tenant must pay the construction costs. If the developer renovates two to five Pagdi buildings, he would be entitled to a 60% incentive on FSI. If there are more than five buildings, the ISF incentive could increase to 70%. The renovation rules for the pagdi 2021 system do not go into the details of the documents required by the customer for the renovation of the pagdi building. However, certain rules must be followed when renovating such a building. These are: The developer only benefits from this benefit if it welcomes existing residents. Paragraphs 33(7)(A) and 33(7)(B) of the RCPD-2034 address these issues. The government`s decision aims to encourage such a redevelopment of residential real estate in the city. Many of them are in a state of disrepair, but their renovation has been stalled for years.
The landowner needs the consent of 51% of the total residents for the redevelopment and must rehabilitate all existing tenants in the new structure. The new remediation rules of 4 July 2019 are already in force. We already have other rental systems such as rental, vacation and licensing systems where a tenant has the ability to negotiate rent with the landlord, or a person can claim ownership of a property by entering into long-term loan agreements under various housing programs and, instead of paying rent, paying a small, affordable amount of EMI to repay loans. similar to paying a small amount of rent under the Pagdi system. Saroj, 85, inherited a lease from his parents. The rents for his 300 sqm apartment in Dadar have gradually risen from about 35 rupees per month to nearly 3,000 rupees per month. Residents of the building next door still pay rent of only 180 rupees per month. “I had no choice but to pay the rising rents because I couldn`t leave the house,” says Naik, who has lived there for more than 70 years.
I believe that to start renovating the Pagdi building, you should contract with the builder and correct a few things such as schedule, prices and costs. The government intended to acquire Pagdi properties under the Real Estate Regulatory Authority (RERA), which will provide buyers with the same support and security as those offered to ordinary properties. Under the current scenario, tenants of pagdi properties are co-developers of the development. Assuming that most of them are former properties, it is necessary to rearrange such units. Since Pagdi`s properties fall under RERA`s authority, these tenants would be entitled to compensation if development is delayed. Currently, the Maharashtra Housing and Area Development Authority (MHADA) levies a tax on these tenants and offers assistance in the maintenance of Pagdi`s properties. The rules also state that if two to five leased buildings are combined for joint redevelopment, the developer will receive 60% of the incentive ISF of the total square footage needed to rehabilitate existing tenants in the form of additional building rights. The government has offered additional TFRs of up to 70% of the total existing built-up area if more than five leased building lots are combined for joint redevelopment. This ensures that existing occupants of these buildings receive up to 12% more carpet space in their new apartments.