Escrow rent account must to redevelop cessed buildings in Maharashtra
PUNE: The state housing department has now made it compulsory for the BMC to provide the Commencement Certificate (CC) for the redevelopment of the cessed property after verifying that the developer has deposited rent of 11 months in an escrow account and submitted written proof of the deposit.
This step has been taken to protect the interests of tenants and prevent exploitation by developers. Besides that this decision will benefit the residents of over 14,000 cessed buildings.
Issued on Thursday, the housing department’s new government resolution (GR) outlining the new guidelines have also scrapped September 11, 2019, GR which had stalled any new clearances from the Mumbai Building Repairs and Reconstruction Board (MBRRB), a part of MHADA. The state cabinet at a meeting on October 29 had approved these guidelines.
According to the earlier process, the owners of cessed buildings took consent from 51 percent of tenants appointed a developer and approached MBRRB for a no-objection certificate (NOC) for redevelopment.
The board saw the eligibility of the tenants and provided NOC to the builder. The developer then got Intimation of Disapproval (IOD) and CC from the BMC, provided transit accommodation or transit rent to the residents of the building before starting construction work.
Developers are expected to finish their projects within 36 months. However, there have been innumerable instances where the project has been delayed indefinitely, with the developer not paying rent to tenants. The MBRRB is presently issuing show-cause notices to over 400 such developers who obtained the NOC but did not start construction for long periods.
New guidelines will make it next to impossible for developers to exploit tenants by not paying the rent. The condition of documentary proof of depositing money in an escrow account needs to be mentioned in the NOC given by MBRRB, the GR says.
GR proposes another guideline to set up a monitoring committee comprising MBRRB’s executive engineer, deputy engineer, the architect of the project, and three representatives of tenants from the cessed building. The committee is also supposed to visit the site of construction every three months. Furthermore, they need to submit a progress report to the MBRRB chief officer to MHADA within 15 days. The CEO needs to review the progress of all projects where NOC has been provided, and submit a quarterly progress report to the government.
