25 Housing projects in Mumbai halted over BMC, realtor dispute

15 Jun 2021 CW Team

At least 25 housing projects in Mumbai are in limbo as realtors and Brihanmumbai Municipal Corporation (BMC) spar over-development fees in mixed-use projects. These projects are residential-cum-commercial projects where the former is predominant.

Development charge for residential use is 4% of the ready reckoner rate and 8% for commercial. An important part of BMC's revenue includes development charges.

While Maharashtra Regional Town Planning Act permits this charge to be levied on the predominant use, BMC has been insisting on charging proportionately. If the predominant formula is applied, large developers can save crores.

Developers told the media that when they apply for a mixed-use development to be charged at a rate of predominant development which is residential, civic officials insist they get an order from the court.

They said BMC must treat a court order as a precedent and not insist on each developer obtaining a fresh order every time.

In two recent orders, the Bombay high court ordered BMC to charge residential rates based on the predominant use formula. In Incline Realty's Borivali project, where 74% is residential, the court referred to the BMC law officer’s opinion who opposed development charges at a commercial rate.

In Oberoi Realty's Goregaon project, the executive engineer and law officer clarified the project was predominantly residential. Yet the developer’s plea was rejected by BMC to recover charges at 4%.

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Also read: Pune real estate sector hit by second wave of Covid-19

Also read: Real estate developers fear project delays due to Covid-19: CREDAI

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