Mumbai: Patra Chawl tenants on warpath as panel fails to submit report – ET RealEstate

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MUMBAI: Tenants of Goregaon‘s Patra Chawl have threatened to intensify their protests as the government-appointed one-man committee tasked to look into their rehabilitation is yet to give its report nearly 11 months after it was set up in January 2020.

After the Maha Vikas Aghadi government came to power, Housing Minister Jitendra Awhad had personally visited the project to understand the problems of the 672 tenants, and promised to rehabilitate them.

The tenants have been struggling without transit rent since 2017 when Guruashish Constructions, a subsidiary of HDIL, went into insolvency. The COVID-19 pandemic severely hit jobs and income levels for the tenants.

“At least two of our tenants ended their lives unable to cope with severe financial stress during the pandemic. But, the government is simply giving extensions to the one-man committee, which was supposed to give its recommendations within 15 days,” said a tenant.

The housing department issued a government resolution on January 16, 2020, appointing former chief secretary Johny Joseph’s committee to study and make recommendations on how to generate rent for the 672 tenants deprived of their homes and a plan for their rehabilitation.

The committee was also tasked to look at completion of 306 tenements that the developer was to hand over to MHADA for distribution through its lottery system. Two years ago, MHADA even allocated the tenements, but they are yet to be completed by the developer.

The committee was given a 15-day extension on February 12 through a GR. On July 24, another GR was issued extending by 30 days. On September 2, the government issued another GR which gave extension from August 1 till September 30. On October 16, another extension was given till November 30.

“In all these GR, the government says this is a final extension. So, a task which the government thought was expected to be completed in 15 days has taken 11 months, and still the report has not been submitted. We have now decided to start relay protest at the site in Goregaon, which will not end till the government acts on our demands,” said Makarand Parab, a part of the Patra Chawl Action Committee.

Government sources said due to the legal complications, the committee has not submitted its report, but the report was expected by the end of December.

The delay in rehabilitating the tenants will delay the possession of home buyers who have purchased apartments in two big projects of private developers, and HDIL’s sale component Meadows, which is also incomplete.

MHADA has said that the saleable components would be given Occupancy Certificate only after rehabilitation component is complete.

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Bombay HC says Govardhangiri society can self-develop or get a new builder – ET RealEstate

MUMBAI: In a relief to a housing society whose decade-old redevelopment project has been mired in delays, transit rent arrears, uncertainties and court battles, Bombay high court recently allowed it to either go for self-development or change the builder, pending arbitration.

In an interim order, HC has restrained the builder from selling or creating any third-party rights in free sale flats to be constructed on the property at Govardhangiri Cooperative Housing Society in Bangur Nagar, Goregaon (West).

If the society appoints another builder, it can seek HC’s nod to add its name to a special court-appointed committee for redevelopment, even if arbitration is still pending between the society and the builder.

“No developer can turn an open-eyed risk into an advantage in equity unless it shows that its risk has been caused or increased by a default by the society, but for which matters would not have come to this pass,” said Justice Gautam Patel. “If the developer wants equity, the developer must demonstrate that it has done equity,” he added.

In this case, HC said, “Clearly, at least at a prima facie stage, this appears to be far from correct” as “substantial work” still remains in redevelopment of the 91-member society with five dilapidated buildings.

The arrears of compensation till March 2020 touched nearly Rs 3 crore, HC noted. A bank guarantee of Rs 3 crore to cover the rent was not furnished. HC said the “condition of members of society’’ has to be the “primary concern of any court of enquiry”.

Senior counsel Raju Subramanian for the society portrayed before HC the “desperate plight of members left to fend for themselves for payment of compensation or rent while in transit’’ and “only being given repeated assurances with no real prospect of seeing their new promised homes ever becoming a reality”.

The society had filed a petition to invoke arbitration in its dispute against developers Bharat Infrastructure & Engineering Ltd and Taksha Spaces after issuing a termination notice in March on the latter.

In 2009, the society decided to go in for redevelopment and in 2012 a development agreement was signed. Both developers were jointly redeveloping.

Bharat Infrastructure exited the project after a 2017 court battle. Subramanian said since August 2016, the builders abruptly suspended payment of transit rents to original occupants. The society alleged other discrepancies in the use of FSI.

HC noted, “ There were breaches in regard to the bank guarantees. The construction was not proceeding according to schedule.” The society said the “situation has gone from bad to worse”.

HC said Taksha’s counsel Karl Tamboly “candidly accepted’’ it was in default on rent payment but said the builder had ploughed large amounts into the project. HC said it was not from “any altruistic motivation-…but to make a profit”. HC said there was “no evidence’’ that the builder has funds to complete the project. In its detailed order, HC said merely saying it is “on the verge of receiving financial support’’ is not good enough. HC said the “balance of convenience” lies firmly on the side of the society in this case since if relief is denied to them the prejudice caused will be “incalculable”.

“All that they are being offered today are more promises. Promises were made before, only to be broken, again and again and again,’’ said Justice Patel.

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Mumbai: No takers for their flats, owners slash rents for first time – ET RealEstate

MUMBAI: A G Mehta never had a problem finding tenants for her flat near Andheri station. Regardless of the rent she demanded—the last time it went for Rs 32,000—the 450-sqft flat used to be snapped up quickly. The lockdown changed the whole dynamic.

Struck by job losses and massive salary cuts, many tenants left the city in the early phases of the lockdown. Some others found it more convenient to work out of their hometowns.

With more and more offices embracing the option of working remotely even after a majority of the restrictions have been lifted, landlords are struggling to find takers for their flats at rates set before the pandemic.

This has not only compelled many to lower their expectations and offer concessions like longer leases so that some income keeps flowing in, but has also given tenants the upper hand in deals—a trend that’s not been seen in Mumbai’s residential rental market in decades. Desperate to hold on to their tenants, many other landlords are waiving rent hikes stipulated in contracts and are also reducing rents.

While Mehta said she’s willing to go as low as Rs 25,000 just to ensure that her flat no longer stays vacant, Prashant Gandhi, who owns two flats in Ghatkopar and Borivali, said he’s already cut the amount by 20 per cent for prospective tenants.

S Jain, who owns a flat in Worli, said advertisements on real estate search portals are also getting bleak responses. “We used to be flooded with calls after putting up an ad, but the ones who are making enquiries now are being extremely cautious. I’m in negotiations with some people.”

Yashika Rohira from Karma Realtors expects this trend to last a while. “The pandemic has had an overwhelming impact on people’s financial conditions. Residential property rents in new and existing agreements have reduced due to a drop in demand. The affordability factor also comes into play. Prices have dropped 5-20 per cent.”

The climbdown isn’t restricted to landlords. Brokers—often accused of being ruthless in charging as much as a month’s rent as their service fee—are also willing to take lower ‘cuts’ just to ensure that deals don’t fall through. Rozario Lancy Lobo, a real estate broker, said the commercial rental segment, too, has seen a decline—of as much as 30 per cent.

Tenants said it was about time that Mumbai’s real estate market— one of the most expensive in the world—underwent a cost correction in the face of a global pandemic. Torsha Sen, an art director who moved homes during the lockdown, said she was able to find a flat in Parel, a prime location, at 20 per cent lower than the usual rate. “This would not have been possible prior to Covid-19’s outbreak.”

Tanya Mishra, a PR consultant who shares a flat in Goregaon with two others, said she was due for a rent hike, as mentioned in the contract, but the landlord decided against it. Soumyodeep Ghosh’s landlord did one better: he readily accepted a request to slash the rent for the Marol flat where he has lived for the last three years by 20 per cent.

It’s the change in the demeanour of property owners and brokers while house-hunting that took Jojo Jose by surprise. “I’ve lived in several rental homes, but never found owners this willing to negotiate on the rents. Some of them even called me back several times with offers lower than what they initially quoted.

Earlier, a Rs 2,000 reduction was the most they would agree to. A few are also approaching me directly based on my searches on websites,” said Jose, who is looking to move out of an apartment in Andheri. “I’m going to make the most of this scenario as long as it lasts.”

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Mumbai: Prabhu Niwas’ residents in lurch as BMC issues demolition notice – ET RealEstate

MUMBAI: Eighteen families residing in the four-storey, Prabhu Niwas building in Vile Parle (east) have been hunting for rental accommodations after civic officials issued a demolition notice two weeks ago. The 60-year old, dilapidated building can’t be redeveloped.

The reason? It is located in the vicinity of the Mumbai airport, but, more importantly, it stands in the shadow of aircraft heading to or leaving the shorter runway of the Mumbai airport.

Height restrictions imposed by the Airports Authority of India for the safety of aircraft that overfly such buildings have adversely impacted their redevelopment prospects.

“Builders usually demolish a structure to construct a taller building and sell the extra flats, which can’t be done here due to height restrictions,” says architect Shrikrishna Shevade, who has been pushing for reforms that would allow these buildings to be redeveloped.

About 3.6 lakh residents live in 6,000-odd buildings in Vile Parle, Santacruz, Kurla and Ghatkopar that are within the 5km radius from the Mumbai airport and fall under its four flight paths, Shevade said. Last September, the BMC sent a letter to the state urban development department about the need for a separate regulation for redevelopment of such buildings.

The solution proposed that builders who take up reconstruction of such buildings be allowed transfer of development rights (TDR) to recover cost of construction, loss of profit etc. Praveen Pardeshi, additional chief secretary, urban development, who took charge two months ago, said that he will be looking into the matter this week.

But until then, residents of buildings like Prabhu Niwas are left with no option. Kurla corporator Ashraf Azmi said there are about 20-22 dilapidated buildings in L-ward, of which quite a few fall under the flight path and can’t be redeveloped. Some buildings have been issued eviction, demolition notices, in others water and power supply cut, residents have moved out, he said.

Vasant Gala, a Prabhu Niwas resident for close to four decades, said: “We pay taxes on time, abide by government rules and yet today, we are on the verge of being homeless.” The case of 18 families of this building is more complicated as they are all tenants, paying rents frozen under the “pagadi” system. In the neighbourhood are newly redeveloped buildings and those under reconstruction as they don’t fall under the flight path. Had they lived in one of those, a builder would have taken up the redevelopment project, paid them for temporary stay and handed over a bigger flat to them with a corpus fund.

For now, the Galas are looking for rented accommodation in Goregaon. “There is a senior citizen couple in our building and five kids from nearby schools. Since we’re all tenants, our concerns are more serious than others who live in such buildings,” he says.

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