Maharashtra Clears New Framework to Redevelop Pagdi Buildings
Real Estate

Maharashtra Clears New Framework to Redevelop Pagdi Buildings

Maharashtra Deputy Chief Minister Eknath Shinde has announced a new regulatory framework to redevelop Mumbai’s pagdi buildings, calling it a “historic decision” that could eventually phase out the tenancy model from the city. Speaking in the legislative assembly, Shinde said the move would accelerate redevelopment of ageing structures, prevent building collapses and reduce loss of life and property.

The pagdi system is a traditional rental arrangement in which tenants pay an upfront amount, enjoy near-lifelong occupancy at nominal rents, and have rights to sublet or transfer their interest. Rooted in pre-Independence practices, the model remains legally recognised but has long been criticised for discouraging maintenance, obstructing redevelopment and fostering informal transactions.

According to Shinde, more than 19,000 rent-controlled buildings in Mumbai operate under the pagdi structure, many of them constructed before 1960. While some have been redeveloped or have deteriorated or collapsed over time, over 13,000 buildings are still awaiting redevelopment. He said progress has been slow due to legal disputes and structural complexities, underscoring the need for a balanced framework that protects both tenants’ and landlords’ rights.

Under the proposed rules, tenants will receive Floor Space Index (FSI) equivalent to the area they currently occupy, while landlords will be entitled to FSI in proportion to their land ownership. For tenants from economically weaker sections and low-income groups, the government will ensure that the full reconstruction cost of their existing homes is covered, as FSI incentives alone are often insufficient. A separate set of rules will be drafted to support this category.

If planning restrictions such as height limits prevent full utilisation of the available FSI, the remaining balance will be granted as Transferable Development Rights. Existing redevelopment options under regulations such as 33(7) and 33(9) will continue, with the new framework offering an additional route for buildings that have not benefited so far.

Shinde noted that nearly 28,000 disputes between tenants and landlords are currently pending in small-cause courts, delaying redevelopment for decades. With the approval of the high court, the state plans to establish additional fast-track courts to resolve these cases within three years. He said the initiative would enable lakhs of Mumbai residents living in pagdi buildings to move into safer, ownership-based homes without injustice to either party.

Experts say a dedicated framework has become essential as existing rent control laws no longer reflect the realities of Mumbai’s ageing housing stock. Extremely low rents under the pagdi system have left landlords with little incentive or capacity to maintain buildings, leading to widespread deterioration. At the same time, disagreements over compensation and rehabilitation have stalled redevelopment in several neighbourhoods.

The reform is expected to bring greater clarity, transparency and efficiency, potentially encouraging landlords and developers to support redevelopment while offering tenants more secure rights in rebuilt properties. Clearer processes could also reduce legal risks, helping speed up redevelopment across Mumbai’s old and congested areas where safety concerns are growing.

Maharashtra Deputy Chief Minister Eknath Shinde has announced a new regulatory framework to redevelop Mumbai’s pagdi buildings, calling it a “historic decision” that could eventually phase out the tenancy model from the city. Speaking in the legislative assembly, Shinde said the move would accelerate redevelopment of ageing structures, prevent building collapses and reduce loss of life and property. The pagdi system is a traditional rental arrangement in which tenants pay an upfront amount, enjoy near-lifelong occupancy at nominal rents, and have rights to sublet or transfer their interest. Rooted in pre-Independence practices, the model remains legally recognised but has long been criticised for discouraging maintenance, obstructing redevelopment and fostering informal transactions. According to Shinde, more than 19,000 rent-controlled buildings in Mumbai operate under the pagdi structure, many of them constructed before 1960. While some have been redeveloped or have deteriorated or collapsed over time, over 13,000 buildings are still awaiting redevelopment. He said progress has been slow due to legal disputes and structural complexities, underscoring the need for a balanced framework that protects both tenants’ and landlords’ rights. Under the proposed rules, tenants will receive Floor Space Index (FSI) equivalent to the area they currently occupy, while landlords will be entitled to FSI in proportion to their land ownership. For tenants from economically weaker sections and low-income groups, the government will ensure that the full reconstruction cost of their existing homes is covered, as FSI incentives alone are often insufficient. A separate set of rules will be drafted to support this category. If planning restrictions such as height limits prevent full utilisation of the available FSI, the remaining balance will be granted as Transferable Development Rights. Existing redevelopment options under regulations such as 33(7) and 33(9) will continue, with the new framework offering an additional route for buildings that have not benefited so far. Shinde noted that nearly 28,000 disputes between tenants and landlords are currently pending in small-cause courts, delaying redevelopment for decades. With the approval of the high court, the state plans to establish additional fast-track courts to resolve these cases within three years. He said the initiative would enable lakhs of Mumbai residents living in pagdi buildings to move into safer, ownership-based homes without injustice to either party. Experts say a dedicated framework has become essential as existing rent control laws no longer reflect the realities of Mumbai’s ageing housing stock. Extremely low rents under the pagdi system have left landlords with little incentive or capacity to maintain buildings, leading to widespread deterioration. At the same time, disagreements over compensation and rehabilitation have stalled redevelopment in several neighbourhoods. The reform is expected to bring greater clarity, transparency and efficiency, potentially encouraging landlords and developers to support redevelopment while offering tenants more secure rights in rebuilt properties. Clearer processes could also reduce legal risks, helping speed up redevelopment across Mumbai’s old and congested areas where safety concerns are growing.

Next Story
Infrastructure Energy

BMW Industries partners with IOCL for PNG supply at Bokaro plant

BMW Industries has entered into a strategic partnership with Indian Oil Corporation (IOCL) for the supply of Piped Natural Gas (PNG), reinforcing its commitment to adopting cleaner and more efficient energy sources for its operations.The agreement was signed at the Eastern Region Pipelines (ERPL) headquarters in Kolkata. The partnership is expected to support the company’s upcoming manufacturing facility in Bokaro by facilitating the use of natural gas as a primary energy source.According to the company, the adoption of PNG will help enhance operational efficiency while also contributing to ..

Next Story
Real Estate

Bombay Realty Secures RERA for Three ICC Tower in South Mumbai

Bombay Realty, the real estate arm of Bombay Dyeing and part of the Wadia Group, has received Real Estate Regulatory Authority (RERA) certification for Three ICC – Wing A, the latest luxury residential tower at Island City Center in Mumbai’s Dadar.The RERA registration marks a key milestone in the development timeline and reinforces the company’s focus on regulatory transparency, timely project delivery, and high construction standards.Following the success of One ICC and Two ICC, the upcoming Three ICC tower represents the next phase of the Island City Center development. The project ai..

Next Story
Infrastructure Energy

Flender launches India’s largest wind gearbox test rig in Walajabad

Flender has inaugurated a 13.5 MW wind turbine gearbox test rig at its Walajabad facility near Chennai, marking the largest installation of its kind in India. The new facility is expected to strengthen the company’s manufacturing and testing capabilities while supporting the growing demands of the wind power sector in both domestic and global markets.The test rig was inaugurated on March 5 in the presence of Andreas Evertz, Group CEO, Flender; Lars Wiegemann, Vice President Wind Gears, Flender; and Vinod Shetty, CEO, Flender India, along with key industry customers and stakeholders.The insta..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement