The tenants living with pagdi system in non-cessed buildings before June 13, 1996, are eligible for new flats whenever their building is redeveloped according to new guidelines introduced by the BMC. In addition, if a tenant has transferred the pagdi system flat in the name of another person after completing the required legal formalities, the new occupant will have equal rights and will be eligible to get accommodation after redevelopment.

The new Development Control and Promotion Regulations (DCPR - 2034) now encourages the redevelopment of these pagdi system buildings by offering alluring incentives to landlords on basis of the total area required to rehabilitate the existing tenants. After redevelopment, the tenants shall become the flat owners.

Most of such non-cessed buildings are situated in the western/central suburbs and as on the date, many of them are in dilapidated condition. Under the pagdi system, the landlord is the owner of the property but possession of the property lies with tenants who pay minimal rent as these properties are covered under the Rent Control Act. However, it is necessary to identify the eligible tenants to protect their rights and to ensure that they vacate the premises without fear when the building goes in for redevelopment.

The new guidelines also stipulate that the landowner should not manipulate the scheme by introducing fictitious tenements to add to his FSI incentives. According to the new DCPR - 2034, whatever the total area the landowner needs to rehabilitate the existing tenants, he will get half of that area in form of additional construction rights to recover the construction cost and his profit.

The rules further state that the tenants are entitled to get more area than they currently occupy minimum area will be 300 sq. ft and maximum 1,292 sq. ft free of cost. If their area crosses the maximum cap, the tenant will have to pay construction cost of the additional area to the landowner.

The rules also state that if two to five tenanted buildings are amalgamated for joint redevelopment, the Developer will get 60% incentive FSI of the total area required to rehabilitate the existing tenants in form of additional construction rights. The Government has offered additional FSI of up to 70% of the total existing built-up area if more than five tenanted building plots are amalgamated for joint redevelopment.

The landowner requires consent of 51% of the total residents to go for redevelopment and must rehabilitate all the existing tenants in the new structure. The new rules dated 4th July, 2019 for redevelopment are already in force.

This will ensure that the existing occupants of such buildings get up to 12% additional carpet area in their new flats. Eligible tenants residing before 1996 according to BMC rules of such buildings are entitled to a minimum 300 sq. ft carpet area, according to the regulations in existence. For more area beyond 12%, the tenants need to negotiate with Developers in consultation with the landowners.

In case of old housing societies, the new regulations have offered an incentive to a builder undertaking redevelopment. This is in the form of a 15% concession while paying premium to the BMC for the additional FSI utilized. For instance, if the Developer was paying to the BMC for additional FSI-TDR 1, now he will pay only for 85% of the total quantum of FSI-TDR. This incentive makes the redevelopment project slightly more viable for the Developer.

After rehabilitating the existing residents, the Developer utilizes the additional FSI to construct more flats for sale to recover expenses and make a profit. The new regulation further says that if societies had paid a premium on the staircase and lift lobby areas when they were constructed, they need not pay it again during redevelopment.

The Developer will get this benefit only if he is reaccommodating the existing residents. The Section 33 (7)(A) and 33 (7)(B) of DCPR - 2034 deals with these subjects. The government’s move is aimed at boosting such redevelopment of residential properties in the city. Many of these are in dilapidated condition, but their redevelopment has been stuck for years.

Civic officials stated the attractive incentives make redevelopment a win-win situation for everyone as residents stand to get bigger houses and landlords/Developers would be encouraged to go in for projects in order to make good profits. A town planner said the incentives will help to generate more housing stock in the city and provide more open spaces and amenities and also assist in controlling rising prices of housing stock.

A senior civic official said, “In case of tenanted buildings, the earlier regulations had offered 50% additional FSI. But according to the new regulations, a single building will get 50% incentive, if two to five buildings come together for joint redevelopment, they will get 60% additional FSI, and if there are more than five buildings, the incentive will be 70%.”

The official added, “Many old housing societies constructed more than three decades ago are in bad condition. Concessions for such societies will attract developers.” The BMC estimates it will lose Rs.600 crore every year as per the new formula for sharing FSI revenue.

While earlier 66% of Fungible FSI premium revenue went to BMC and 34% to the State, the new regulations call for a 50:50 ratio. The additional FSI premium revenue was earlier shared equally between BMC and state. It will now be divided so that BMC, State Govt., MSRDC (a State Govt. Body) and Dharavi Redevelopment Project (associated with the State Government) get a 25% share each.


AS PER DCPR - 2034

Sanctioned as proposed with following modification.

Sub Regulation 33(7)(A)(a) is modified as below.

In case of the plot consisting of only tenant occupied building, the FSI shall be equal to FSI required for rehabilitation of existing lawful tenant plus 50% incentive FSI and the occupier shall be eligible for 5% additional rehab carpet area.

New proviso is added in Sub-Regulation 33(7)(A)(b) provided further that in case of composite redevelopment undertaken asmention in (a) & (b) above for two or more but not more than five plots of tenant occupied buildings the incentive FSI shall be 60% & the occupier shall be eligible for 8% additional rehab carpet area and for plots six or more then incentive shall be 70% and the occupier shall be eligible for 12% additional rehab carpet area.

Clause 3 in Appendix is modified to the effect that each tenant shall be rehabilitated and given the carpet area occupied by him for residential purpose in the old building subject to the minimum fixed carpet area of 27.88 sq. m (300 sq. ft) and/or maximum carpet area up 120 sq. mtrs. (1292 sq. ft.) free of cost. In case of non-residential occupier, the area to be given free of cost in the reconstructed building shall be equivalent to the area occupied in the old building. Provided that if carpet area for residential purpose exceeds 120 sq. mtrs. (1292 sq. ft.) the cost of construction shall be paid by tenant to the Developer. The cost of construction shall be as per ready reckoner rate of that year.

However, the carpet area exceeding 120 sq. mtrs. (1292 sq. ft.) shall be considered for rehab FSI but shall not be considered for incentive FSI. Provided further that each eligible residential cum commercial occupant shall be entitled to a tenement of minimum carpet area of 27.88 sq. mtrs. (300 sq. ft.). For purpose of existing carpet area/rehabilitation carpet area means the net usable floor area within a tenement excluding that covered by the walls or any other areas specifically exempted from FSI computation as per then Regulation but including the areas of balcony if allowed free of FSI as per then Regulation. This shall not be applicable for non-tenanted buildings.

Clause 4 is modified specifies that no new tenancy created after 13/6/96 shall be considered. Further, unauthorized construction made in buildings for creating new tenancy in the existing tenancies shall not be considered while doing computation of existing FSI. A certified inspection extract of the Municipal Corporation for the year 1995-96 or Court Order proving the existence of tenements prior to 13/6/96 shall be considered adequate evidence to establish the number of tenements.