FLAT PURCHASERS BETRAYED: NO PROTECTION IN THE PROPOSED MAHARASHTRA HOUSING (REGULATION & DEVELOPMENT) BILL 2012

Hidden charges, Possession Delays, Broken Promises, Breach of Trust, Cheating, Unfair Trade Practice, Deficiency in Service, Abandonment of Redevelopment Projects half way, Corruption and Malpractice, Dishonest Strategies to pocket the Redevelopment Assignment, Illegal Constructions, Violation of Acts, Laws and Rules, Vanishing Builders…Such frustrating and iniquitous experience by and large are faced today while purchasing of a lifetime shelter by a middle class flat purchasers.

The Maharashtra Housing (Regulation & Development) Bill 2012 is strangely enough, drafted in gross dissimilarity and contrast to The Real Estate (Regulation & Development) Act 2011 enacted by Central Government though fallaciously proclaimed by the Maharashtra Government as the second protective umbrella being provided that touches the life of an adolescent and gullible flat purchasers.

The First protective umbrella of its kind was The Maharashtra Ownership Flat Owners Act (MOFA) enacted in 1963. Despite being a subject of scorn and a source of torment, the Real Estate Laws have so far been governed by a patchwork of Regulations that promote arbitrariness and leave plenty of corrupt and dishonest twists for offenders.  

It is absolutely essential to have a Real Estate Regulator with stringent punitive provisions. The absence of a strict Regulator is the root cause of corruption, frauds, cheating and malpractice. It should be the Regulator’s job to ensure that Builders follow Rules, deliver the quality and take them to task if they fail. It’s why there is so much riding on this Law. It could make Builders accountable to property purchasers. It could pressure the Government to hold the Builders accountable. Unfortunately, the operative word here is ‘could’.

As per the age old scenario in Realty Sector, the cycle of corruption and black money starts from clearances given by various Government and Municipal Authorities. The choice for Builders is to pay bribes or endure a wait. If money paid, it doesn’t take long to get approvals whereas normally as per practice, the Builders get required approvals in two to four months. But it adds 20-30% to the Project Cost. Unfortunately, the Bill does not attack this link in the corruption chain. The Regulator Bill does not have any powers over State Bodies or Municipalities to check this delinquency.

It is awful to state that even without knowledge of several MLA, MLC and PUBLIC of the Maharashtra State a Bill known as “Maharashtra Housing (Regulation & Development) Bill 2012” was introduced in Maharashtra State Assembly on 11.04.2012 to be passed on 18.04.2012 without having due discussion or public participation. However, because of some opposition instead of getting it passed, the Assembly was forced to form a Joint Committee who invited public suggestion (latest up to 19.05.2012) by giving a small News Item in Loksatta, a Marathi Newspaper appeared on page 3 of 07.05.2012. It is quite evident that this entire process was done in suspicious and unfair manner contrary to principles of the largest democracy of the world.

There is a clear public opinion in Maharashtra State that the proposed Bill is a self-defeating of its very objectives and it will not only doom Reality Sector, cause irreversible damages to flat purchasers at large. However, it will surely facilitate the night by flyers operators in the Reality Sector causing irreversible and permanent damages to all.

There is sufficient reason to derive a conclusive evidence that the proposed Bill is nothing short of an attempt to initiate not only to overrule  the exemplary decisions of the Supreme Court on the basis of the  existing MOFA, there are glaring defects in the proposed Act. Such toothless propositions in the Housing Regulatory Bill will invite more litigation than helping the innocent flat purchasers.

It is entirely Builder friendly proposition in compromise with the interest of the needy flat purchasers; it has not been considered that the flat purchasers are interested to get their flats within the terms and conditions of the Agreement and not for the insignificant compensation from the Builders. It is undoubtedly evident that the Housing Department / Officer in association with the unruly Builder Lobby, have prepared this Bill and the same was approved by the Cabinet and is now before the Maharashtra State Assembly.

No single provision is incorporated in the Central Government proposed “Real Estate (Regulation and Development) Act, 2011 which could control and monitor the unfair manipulative and unscrupulous activities of the Builders. The same has also not been included in the proposed Bill of the Maharashtra State Govt. 

MOFA, 1963 is in existence in Maharashtra for more than 4 decades and over the time, the Act has become so matured due to which the most of the unfair and manipulative practices of Builders were in control to a significant extent, has been completely repealed. The Housing Societies have strongly objected to repeal the existing MOFA which could be suitably amended with specific care not to allow any dilution of the rights and privileges already provided to the flat purchasers through the existing MOFA wherein there are uncompromising provisions to push the guilty Builders behind bars through the recourse of law.

The most surprising is that the Maharashtra State Bill is not made applicable to all the Stake Holders and also all the Authorities which undertake construction activities like MHADA, Repair Board, SRA and CIDCO whereas as per the Central Realty Regulatory Act, all the Authorities Including Government and Semi Govt are covered under the legislation. Does this not amount to diluting of the provisions of the Central Bill by Maharashtra Government to facilitate the dishonest and fraudulent Builders of the State?

The RIGHT to HOUSING is not provided in the State Bill whereas this Provision is already stipulated in the Central Realty Regulatory Act. The Regulator should have a power to appoint a Court Receiver, take the possession of the flat or the building and then complete the formalities of handing over the flat to the victim.

In case of delay of getting the possession of the flat from the Builder or cancelling the contract, there is no protection to flat purchasers to get the flat but refund of money with maximum rate of 15% interest. Flat purchasers may have to fight till Supreme Court to get the refund and interest thereon. In real estate, normally black money is accepted by the Builder at the time of executing the Agreement. If the refund has to be given, what will happen to the black money?

Further the value of the flat goes up so much that the flat purchaser needs to get the market value at the time of cancellation instead of refund of original amount with interest. The flat buyer needs to get the house and not the refund of money.  The Regulator should be able to order to provide the house within the nearby area or pay the money at the applicable market rate. Unfortunately, there is no such provision in the Bill except paltry interest @ 15% on refund of money.

In fact, the Regulator should verify the applicable market value prevailing on the date of cancellation of contract and should be lawfully compensated with increased rate or the interest rate whichever is more and not based only on prescribed rate of interest@ 15%.

The Builder may knowingly delay the project and compel the flat purchasers to cancel the Agreement.  In such cases, the Builder should be compelled to pay the rent double the prevailing market rate till the occupation is handed over after the expiry of the agreed date of handing over the possession. The asset of like value of the flat of the Builder should be attached or confiscated till the liabilities of the flat purchasers are discharged. 

The Builder is permitted to sell the flat and receive 20% amount without executing the Agreement. He is required to only submit the proposed plan with his own signature or Architect signature to the Regulator/ Website of the Government. If the permission is given to upload the project on Website of the Government on the basis of Architect’s signed plan or on basis of self authenticated copy of Builder, he may recover the money up to 20% and then plan to refund the amount with interest on fictitious / fabricated reasons.

In such case, giving permission to collect deposit from the public in the name of booking the flat is against the RBI and SEBI Laws. The Website entry should not be given unless and until the plans are approved by the Local Authority and the various permissions which have to be obtained in due course by the Builder. Further the permissions obtained thereafter as per IOD should be uploaded on the Website within 3 days of receipt by them or the Local Authority should be asked to upload on the Website within three days of granting the permission.

In the present Bill it is stipulated that in a layout of having more than 1000 sq. m. & if the project is not completed within dye course, only Structural Conveyance will be given & Land Conveyance will be given only after completion of construction. This Provision is against the Judgment in the case of M/s. Jayantilal Investment V/s Madhuvihar CHS Ltd. The Complete Conveyance Deed should be executed as per the existing MOFA, 1963 within 4 months of formation of the Society. By permitting the Structure Conveyance, the Builder will misuse this provision and will never give the Conveyance of the Land to the Society or the Federation.

Another disgusting provision in favour of the Builders’ Lobby is that all the future FSI and TDR will be with the Builder till the Complete Conveyance is given to the Society or the Federation. If such provisions are made in the Act, the Builders are going to misuse the same for their advantages.

MOFA prescribes for sale of only carpet area and no common areas can be sold. With the introduction of the concept of independent area, restricted common area and utility area, the Builders will start designating the open areas or free of FSI areas as independent area, car parking area and utility area etc. and will start selling them to innocent flat purchasers.

Supreme Court has held that any area or car parking area which is not forming part of FSI and is not designated as flat cannot be sold. The proposed Law attempts to dilute this provision and will encourage the Builders to do further wrongs. The Development Control Rules were changed by BMC to plug this loophole but now this Bill is further going to give an opportunity to the Builders to sell even the open area called as independent area or utility area. The greedy Builders will certainly cash this blunder of the Government.

The Bill further announces that the Builder can change RG Plan; Garden Plan till the layout is not completed. The layout means 1000 Sq. Meters of the land. This provision is also against many of the High Court Judgements. The Builder should not be given permission to change the RG and playground without taking the permission from the flat owners who have already purchased the flats on the basis of disclosed information.

If the Builder either does not deliver or violates of Rules then in such cases, instead of imprisonment, he is required to pay only penalty ranging between Rupees One Thousand to Rs. One crores. Naturally, the penalty will be contested by the Builder till Supreme Court. In spite of having the provision of criminal proceedings against the Builder for violating the provisions of Law, the Builders are taking the flat purchasers for a ride.  In the present Bill, the criminal proceedings against such scandalous and fraud Builders have been given up / dropped to protect such criminals so that the Government harvest their illegal revenues from the Builders’ Lobby.

In the New Bill, the Builder can disconnect essential services like electricity, water of the defaulter flat purchaser which is against Human Rights. This provision is also against the Essential Commodity Supply Act and the State cannot give power to such disreputable lobby to act against the innocent flat purchasers.

The Central Government has proposed that 70% of the amount collected from the flat purchasers to be kept in a separate escrow account till the completion of the project.  This provision has been completely ignored by the State Government for the suspicious reasons best known to them.

The eminent and proficient personalities who have all the required expertise should judicially challenge the horrendous Bill by filing PIL in Mumbai High Court in common interest of the flat purchasers.

It is repulsive and undoubted fact that this Bill since having no impact despite the prima facie evidences against the criminals does not have the power of rigorous accountability requirements. This has resulted in to a massive ingress of corrupt elements in to the all-round system led by the Govt. and its Agencies. 

An example of illusory and deceitful pronouncement of our Govt. under the pretence of providing protection to the flat cheated purchasers, passionately announced to inflict heavy fine including sending the criminal developers to jail. Please open the link below:

The Title says “State tightens screws on dodgy developers”

Has your Builder cheated you? Now send him to jail

http://www.mumbaimirror.com/index.aspx?page=article&sectid=15&contentid=20111114201111140902289679e9f61e5 Wherein it is stated that taking note of a growing number of complaints against crooked Builders; the State Government has decided to bring in amendments to the Maharashtra Ownership Flats Act that will ensure “heavier fines and jail terms” for rogue developers.

The article says that while earlier, disputes between home owners/purchasers and developers were directed to the consumer or civil courts (police stations have generally shied away from filing criminal complaints in cases relating to housing), under the new provisions Builders can be sent to jail for “between six months and a year” while fines will range from Rs 5 lakhs to Rs 10 lakhs.

Has anybody ever wondered that why suddenly, now in the final move, the Govt. has rolled back from the “jail terms” and is satisfied with camouflaged punishment of so-called “heavier” penalty of one crore?

The ubiquitous fact is the warm and silky relationships between the Builders and various agencies of Govt. cannot be at stake at the cost of protecting the flat purchasers by imposing stringent and inflexible laws on an assembly of golden goose laying the golden eggs. The populace of our country had never attained the desired significance in the eyes of the ruling party.  

In MOFA, Form No: V refers to a Model Form of Agreement to be entered into between the Promoter and Purchaser of Flat with specific clauses to remain mandatory to the Provisions of Act and any violation or twisting in these clauses by a Builder is considered criminal under IPC.

Are we sure that on account of varied types of harassment meted out to the naive and gullible purchasers by fraud and cheat Builders since ages would be compensated by a paltry sum of Rs. One crore every year? Have we ever heard any buyer has cheated the Builder?

What is the value of one crore for an unprincipled and iniquitous Builder that too without any imprisonment?  Will this amount ever go to the victims of fraudulent acts of the Builders or will it go to the Govt. Treasury at the cost of Flat Buyer’s burial?

Is it justified that a refund of booking money @ of 15% would compensate the agony and distress of common family man when the prices are soaring every month and leaving him high and dry to again undergo the entire process to find another shelter?

Numerous cases are on record where the dreams of innocent middle class families are crashed when the redevelopment assignments undertaken by Developers are neither accomplished in given time by such Builders nor are the promised facilities made available or never provided.

There are no rigorous provisions in the Bill as to how the justice would be meted out to the sufferers against varied offences of Breach of Trust, Cheating, Breach of Documented Terms, Manipulative and Unscrupulous Attitude, Unfair Trade Practice and Deficiency in Service which necessitate punishment nothing less than arduous imprisonment and set example for the rest of the Builders.

Every other day we read in News Papers that in addition to the unsolved and ever mounting cases, more and more number of cases of the aggrieved flat purchasers are being referred to various Courts like Civil Court, High Court, Criminal Court, Consumer Court, State Level Commission, National Level Commission, Tribunals and Supreme Court.

Now, all such cases will be referred to only one source i.e. Housing Appellate Tribunal. One can imagine what sort of an Administrative Infrastructure shall be made available to the HAT and whether would there be any unadulterated and rock-hard mechanism by which the HAT will be able to check the effective implementation of its decision. It is a matter of doubt whether a flat buyer will ever get justice to reach finality during the rest of the tenure of his life.

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Drawbacks and disadvantages in Govt. Guidelines for Redevelopment

With a view to ensure transparency in Societies seeking to undertake redevelopment projects, the Government of Maharashtra had issued a Circular bearing No. CHS 2007/CR554/14-C, Co-operation, Marketing and Textiles Department Date: 3rd January 2009 this contains a Directive under Section 79 (A) of Maharashtra Co-operative Societies Act 1960 for all the Co-operative Housing Societies in the State of Maharashtra regarding the Redevelopment of Buildings of Co-operative Housing Societies. These guidelines are applicable wherever the buildings of Co-operative Housing Societies in the State of Maharashtra are being redeveloped on a large scale.

It is implied that these guidelines are to be followed stringently before any step or idea of redevelopment is mooted by the Managing Committee amongst the members of the Society. In the following article, I have endeavoured to bring out certain vital but unnoticed areas of redevelopment aspects that have dejectedly escaped the attention of the Government while formulating these guidelines.

A new home in place of old is a dream that every resident member either tenanted or owner of the flat share. Wrecked buildings often on the threshold of collapse are a depressing reality for thousands of Housing Societies across Mumbai city and its suburbs. With structural strength already poorly affected and conditions deteriorating further with each passing day, week and month, sooner or later the stage arises when members start aggressively exploring the possibility of redevelopment as the only option for their properties rather than spending lakhs after cosmetic repairs and yet, the buildings remain as old as ever.

However, deciding and implementing a venture of changeover from an old dilapidated building to new and specious houses with stable structure is a Himalayan Task. With imperfect or ambiguous information creating friction among members with no knowledge and poor leadership of Office Bearers of the Societies lead to diffident situation at a later date or during the tenure of redevelopment project making it difficult to achieve the desired results.

The non-availability of conveyance from the old owners/Builders renders the Societies liable the entire process of redevelopment break down instantly. Identifying the right kind of Builder or Developer is another challenge. There are various reasons due to which the redevelopment of old buildings has become a common cause of serious concern for the thousands of Housing Societies across Mumbai. It is the calamitous need of the hour that those Societies standing on the threshold of redevelopment and want to ensure the successful completion of redevelopment task without any imperil; get genuine advice and educate themselves by the redevelopment experts and counsellors having both, the experience and expertise.

It is said that Co-operative Movement is a Socio-Economic and Moral Movement. It is to fulfil the Constitutional Goal of the community that it is encouraged by the Government. It is neither a profit making activity nor is it a device for building power politics. Its candid role cannot be forgotten or else it will lose its sanctity and reliability.

It should be ensured that any activity of redevelopment of Housing Society should not compromise the rights of members and must safeguard the existence of the Society. In case the dissenting members fail to abide by the resolutions passed at the meetings then it is not the Developer to use his power but the Managing Committee of the Society who has to initiate appropriate action against those dissenting members under the recourse of law.

In most of the redevelopment projects one world is always missing i.e. “Co-operation” by all members of the Society. Some members in minority disapprove the decision of redevelopment merely because they manage to survive as opposition. However, their opposition must be acknowledged if it is judiciously established that their disagreement to issue of redevelopment is due to non-transparency, criminal conspiracy, underhand dealings or undesired favouritism to the Developer by the Members of their Managing Committee, fraud or misrepresentation or due to some statutory prohibitions.

The rule of supremacy of majority in Society’s affairs should prevail in cases where proper process of redevelopment is followed up, emphasize is given to the cooperative nature of Society’s deal by discussing each and every aspect of redevelopment openly in General Body Meetings and considering the suggestions in its true spirit, transparency in negotiations with the Developer thereby maintaining an equivalence among members.

The Govt. Guidelines have clearly spell out the process of calling meeting for redevelopment and business of such meetings, process of selection of Developer, appointment of an authorized officer from Dy. Registrar’s office, deliberations on the terms of Development Agreement and so on. However, in light of various observations made, it is a matter of thought whether these Guidelines for redevelopment of Society buildings and its process need thorough reconsideration and revision by the Government.

There should be an absolute transparency and integrity from the Developer’s side in executing the Development Agreement. In most of redevelopment projects, the Managing Committee passes the resolution in favour of a Developer and set out vital commercial terms of Development Agreement. The Managing Committee thereafter negotiates these terms with the Developer and signs the agreement on behalf of the Society. There are certain very crucial and imperative questions on the practice of incorporating these terms/clauses which silently, provide rights to the Developer in the property of the Society in the so called “Development Agreement”.

Very often, the clauses in the Development Agreement between the Society and the Builder/Developer are such that all rights of the Society in the land including the benefits attached to the same in the form of existing/future FSI etc. are surrendered to the Builder/Developer. Thus, the Society not only looses the existing structure and building completely but is divested of its right and title in the land itself. If all such arrangements are accepted at their face value, then, the existence of the Co-Operative Housing Society itself is threatened.

For example, in the Development Agreement, many times under the head of “Developer’s Area Entitlement” it is quoted that ‘save and except the flat areas agreed to be allotted to the members of the Society under this Development Agreement besides the Society’s areas and all additional premises/areas constructed, shall belong solely to the Developer including the increase in future FSI of the Society by virtue of its enhancement declared by the Government as a policy decision’.

Is it not giving away the “Rights in Property” rather than assigning only the “Development Rights”? Every Managing Committee needs to be prudent and cautious while negotiating the terms and principles that are governing the Development Agreement. The market practice of adding such clauses as giving away the absolute right and authority to consume future FSI in Development Agreement creates rights in the property itself in favour of Developer.

These are the deceptive trade tricks of the Developers to create their ownership rights over the property of the Society. The Managing Committee of every Society must ensure to protect the title of property which exclusively belongs to the Society and such wicked and manipulative clauses are not supposed to be entertained or contemplated while approving the draft of Development Agreement.

It must be remembered that in case of negotiating and agreeing to the terms of Development Agreement, the Developer has to act only as an agent of the Society, purchase TDR in Society’s name, obtain various permissions in Society’s name and enter into Society’s premises as a licensee for developing the property and lieu of these performances, he gets his profitable consideration by way of selling his designated portion in the redeveloped area proportionately available to him out of additional FSI.

The Developer’s assignment of redevelopment comes to an end the moment the Occupancy Certificate is issued by the competent authority and handed over to the Society. It is needless to mention that the Society always remains the owner of its entire property including the future enhancement in FSI.

It is very essential here to pronounce that the Government Guidelines issued vide its circular dated 3rd January, 2009 should have covered the aspects of TDR/FSI and other rights attached to the land and property of the Society. Going through the fine print of these guidelines indicate that several vital aspects are lost sight of and the rights of the members are not given serious consideration.

The Government directives do not deal with the aspect of TDR/FSI and other rights attached to the land and how they have to be dealt with. Therefore, in case the Society desires to assign the development rights in the property to the Developer by way of executing the Development Agreement then the nature of such rights should be adequately documented by the Government with a view not to allow the Developer s to encroach or establish their future claims in the property of any Society.

The Government guidelines should also emphasis strongly on the discussions are to be held at the General Body Meeting of the Society on all the agreed terms of Development Agreement between the Developer  and Managing Committee as the present guidelines of the Government do not provide for approval of draft Development Agreement at General Body Meeting and hence in case Managing Committee innocently or without understanding its implications, creates such rights in Society’s property in favour of the Developer and then the entire Development Agreement becomes vulnerable to such clauses and is exposed to risks of ownership of Society’s property.

All the members of the Society must read the fine prints of the Development Agreement containing the vital terms and offer their thoughtful and solicitous comments and observations before getting the draft Development Agreement approved in the General Meeting as here is a question of handing over of their hard earned shelters to the Developer.

It is largely observed that the draft of Development Agreement is presented by the Developer to the Society, is always found “Developer Friendly Draft” which has to be restructured by the Society with in-depth study and ensure that all protections are available under the law and make it “Society Friendly Draft” to avoid any litigation at a later date.

Apart from maintaining the absolute transparency in Development Agreement, one of major impediments that contribute in redevelopment process is the allegation of discrimination among the members of the Society and underhand dealings including receiving illegal gratifications from the Developer s particularly by the Managing Committee. The allegations of underhand dealings if any should be probed thoroughly before execution of Development Agreement.

The conflict of supremacy of Society’s resolution and rule of majority v/s Individual interest in redevelopment may sometime be fatal. Merely because some members in minority disapprove of the decision cannot be the basis to negate the decision of the General Body. As per the present Government guidelines on redevelopment, the rule of supremacy of General body is unquestionable, yet the valid objections of minority should not be ruled out and there should be a mechanism where their objections are adequately and expeditiously resolved.

The issue of conflict between collective interest and individual interest should be clearly addressed in the Government guidelines as otherwise; the minority will always feel subjugated and dispirited in such redevelopment work and in all probability the pace of redevelopment will suffer.

The Government guidelines are silent over a crucial issue and that is in case the non-cooperating member does not vacate, the Society should be delegated with powers of getting the resolution passed against the non-cooperating member and expel him with at least ¾ majorities since getting the order against him for eviction through Cooperative Court is costly, tedious and time consuming.

The Developer cannot initiate process of evicting dissenting member under the shelter of Development Agreement as the agreement never establishes privity of contract with the individual member or a dissenting member and hence for getting peaceful possession of the Society’s property, the Society has to take appropriate action against the dissenting member. The Government guidelines do not provide any efficient mechanism to solve such hindrance and handover peaceful possession of Society’s property to Developer to carry out redevelopment.

At times, the perception of safety over vital issues affecting the redevelopment can itself be a key point of litigation by dissenting members. The penalty and termination clauses in a Development Agreement are not enough protection to Society members in case the construction does not proceed or for some reason is halted or stopped. Further, many times, a Development Agreement doesn’t provide for termination of the agreement since such clauses cause discomfort to a Developer and hence the only remedy left with the Society is to go for prolong litigation of termination of the agreement and/or wait for getting penalty for delay in handing over of new structure.

Under such circumstances, there is no certainty of getting the redeveloped houses within agreed time and the existence of the Society itself is in danger. The Government guidelines provide some more protections like time bound completion of redevelopment project, providing financial Bank Guarantee of 20% of the project cost and non transferability of the development rights etc.

Here, one more issue requires serious concern that as per the Government guidelines, if the Developer provides a financial Bank Guarantee of 20% of the project cost as security, what about the unsecured portion of remaining 80%? In case the Developer abandons the redevelopment project leaving the Housing Society high and dry, whether cashing of the financial Bank Guarantee of 20% of the project cost is sufficient to complete the project and re-house the existing members in new premises?

The Government guidelines are alarmingly deficient and lack in the matter of such lifetime security issue of individual member who surrenders his shelter to remain in main stream. The Housing Societies must ensure to demand financial Bank Guarantee of 100% of the construct cost of at least the total residential area to reconstruct the premises belong to their existing members.

Looking to the enormous need of redevelopment in the city, a regulatory body should be created to oversee effective execution of redevelopment projects and quick remedy of Society’s and member’s grievances. Further, the safety of Society in redevelopment process needs to be reconsidered in the Government guidelines.

To sum up, though the Government guidelines for redevelopment of Housing Societies has tried to thrust and maintain transparency by the Housing Societies in the process of redevelopment. However, apart from above mentioned issues raised, the following issues also need to be given due concern to incorporate in the revised guidelines as soon as possible to safe guard the corporate interest of Housing Societies for more efficient redevelopment:

a) After the finalization of draft tender form and in order to get competitive quotations from experienced, reputed and reliable Developers, the Society should publish an advertisement in at least three leading News Papers of the city and invite offers rather than Society’s members to be entitled to furnish information about the Developer known to them.

It is worth to mention here that in the name of redevelopment of old housing societies in Mumbai, the various authorities, in last few years have carpeted free ground to breed rampant corruption to benefit the private builders to sub serve their illegal and deceitful objectives to garner huge profit. This is most required of the Government to impede the members of Managing Committees to enjoy the sleep with the builders for few greens and thrust redevelopment idea on the innocent and gullible members.

The corrupt members of the Managing Committees also resort to arm twisting, harassment and threatening method to the flat owners into submission as per the builder’s orders. Scared by such hounding tactics, most society members accept and offer their consent towards the redevelopment of their society without any protest and prefer to go along with whatever the members of the whole Managing Committee decides.

It is well known fact that the illegal gratifications and lavish spending by a large cartel of unscrupulous Builders entice the members of the Managing Committees of Cooperative Societies and provoke them to turn against their own members of the Society in the matter of obtaining consent and force implementation of redevelopment.

b) Members should be allowed to cast their vote through one of their family member as proxy, since many of times they may not be able to remain present in the General Body meetings held to discuss important issues and pass the resolutions;

c) Formation of high profiled Credit Rating Agency consisting of Industry Experts exclusively under the control of Housing Ministry of Central Government for Registration and fixing the grades for the Developers since in redevelopment projects of Housing Societies and SRA projects, the existence of the Society itself is challenged and it may get trapped into the community of III tire Developers’ taller claims to bag the projects beyond their means and capacity;

d) Provide for mechanism for quick action and appointment of a new Developer in case of non performing Developer;

e) Provide for stern penalty measures including imprisonment and blacklisting of Developer in case he Developer fails to execute the project in time.

f) Suitable legal action to initiate and severe action against unauthorized constructions, selling of car parking basement area as commercial, violation of rules of DCR, MMRDA, MRTP and BMC.

It has been often noticed that during the process of redevelopment, the terms of Development Agreements as agreed upon, the unhealthy attempts with ulterior motives are made by the Developers to twist and grossly violate the rules of MRTP and DCR by unlawful planning and constructing additional/unauthorized areas that are beyond their entitlement (i.e. beyond the plot FSI and the TDR/FSI loaded) for their hidden financial gains. The buyers of such unlawful flats/properties land themselves in deals that lead to litigation at a later date.

The ill- observance of MRTP/MCGM/DCR rules and guidelines are overlooked by the sympathetic officials of the MCGM and the plans so submitted, are sanctioned without verifying the eligibility or its conformity with the Development Agreements.

The Projects are completed and the Occupancy Certificates are issued without the proper inspection neither carried out by the MCGM officials nor taking pains to verify whether the actual measurement of the constructed areas tally with the final plans submitted.

It is further noticed that upon the completion of the projects, these additional/unauthorized constructions are silently regularized at the last moment by executing the Supplemental Agreements with the Office Bearers of the Societies with green handshakes/offering them handsome rewards.

g) Provision for providing financial Bank Guarantee of 100% of the total construction cost of total project cost/cost of construction for residential FSI to re-house the existing members.

h) Clarification on the applicability of Government guidelines wholly or partly in cases where a Society has only passed a resolution for appointment of Developer prior to the implementation of guidelines i.e. 3rd January 2009 and further steps are pending for ongoing negotiation of commercial terms between the Housing Society and the Developer.

There are several instances of incomplete or misleading information prevailing among the Housing Societies and flat owners as well that are planning for redevelopment. Controversial court judgments add to the confusion and such Housing Societies get stuck at some point due to lack of information, knowledge, contact with right kind of counsellors, analysts, advisors etc. Many societies do not have conveyance and hence, the entire process can break down in an instant.

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