MUMBAI: The construction of a plush residential skyscraper on a tiny plot opposite Khar Gymkhana has been challenged in the Bombay high court on the grounds that it is “illegal”.
A writ petition filed by a bungalow owner, whose property is next to the upcoming highrise, attached copies of TOI reports on the project last August. This newspaper had revealed how initial permission from the Brihanmumbai Municipal Corporation (BMC) was for a 12-storey building. But the builder, K Mordani Realty, approached the slum rehabilitation authority (SRA) and procured sanction to increase its height to 20 floors.
Mordani exploited a little-known provision under development control regulation 33 (14) to get higher floor space index (FSI), claiming it will construct free transit tenements for project-hit persons on that plot or elsewhere. These tenements would then be handed over to the SRA.
The petitioner, Harinder Pal Macker, said there were no slums or hutment-dwellers on the plot on 16th Road, Khar; a ground plus one-storey building existed there earlier. “Disclosure that permission for construction of a 20-storey building was granted shocked the petitioners. When the foundation was laid, it was only for a building consisting stilt, car parking podium and 14 upper floors. The foundation would not be able to bear the load of additional floors; it will endanger the building and its occupants, and also structures on adjoining plots,” the petition said.
The BMC, SRA, state urban development department and builder have been named respondents in the petition.
Macker said there was no open space between his boundary wall. “How could the authorities grant permission for a multi-storey building on a small plot of 670 sq yards… building concessions were granted without mandatory open space requirements and without considering or notifying neighbouring plot owners,” it said.
The BMC later issued a stop-work notice to the builder but Mordani approached the city civil court, which directed the building’s architect to submit amended plans for regularization. The builder, however, approached the SRA to develop the plot under DCR 33 (14), “which contemplated that what is being constructed was a permanent transit accommodation”. The SRA approved the proposal for “providing a permanent transit colony having tenement carpet area of 300 sq ft each and FSI 2.5”. The petition said several approvals and concessions granted by the BMC and SRA were in “gross violation” of various provisions and acts.
Macker has sought the court’s direction to “demolish” the illegal portions.
MUMBAI: The economic offences wing (EOW) has arrested a woman and her two associates for allegedly fabricating a gift deed and transferring a Rs 100-crore plot to three brothers in Chembur.
Those arrested are Geeta Mirai (49)—who worked as an agent with the sub-registrar’s office that handles property registrations—and her associates Gangadhar Marchande and Sanjay Khale. EOW had earlier arrested sub-registrar Surendra Kadam in the case.
The case pertains to a gift deed of a Chembur property worth Rs 100 crore, belonging to Sitadevi Jaisingh’s family. The plot, which houses many structures, including Asha Studio, is near RK Studios on the Sion-Trombay road. Jaisingh, who owned the 10,000 sq m property, died in 2006. Jaisingh had three sons—Shyam, Brijmohan and Kedarnath and three daughters. In 2007, Kedarnath passed away leaving two sons Anil and Vinod.
After Jaisingh’s death, the four suspects prepared a gift deed, showing she had gifted them the property. The sons-in-law lodged a police complaint. During the probe, police found that the gift deed between Jaisingh and the four suspects was made on July 15, 2005, at the Nahoor registrar office in Mulund instead of Chembur office. Jaisingh’s sons-in-law, through RTI, found discrepancies in the claims.
Kadam was in the Nahoor office on the said day, though he claimed that he finished the registration process in Chembur. Jaisingh always used to sign documents, but the gift deed contains her thumb impression.
The BMC’s preparatory study for Development Plan (DP; 2014-34) has not taken into consideration population density while determining the open space reservation for Mumbai: merely 2 sq m per person. A low open space reservation means few recreational grounds, gardens, parks and playgrounds.
Pointing out the deficiency, urban planners have compared the per capita open space proposed for Mumbai with that existing in global cities.
While the proposal for Mumbai is only 2 sq m per person (the city’s area is 458 sq km, population 12.44 million and population density 27,160 people per sq km), the per capita open space in Singapore is 7.5 sq m per person, New York City 6, Tokyo 4.5 and Hong Kong 2.
“The Development Plan preparatory study fails to acknowledge the extremely high population density of Mumbai. The city is four times more densely populated than Singapore, but the proposed per capita open space is a sixth of the sovereign city-state,” said Siddharth Pandit, director (projects), Urban Design Research Institute (UDRI).
The study seeks to justify the open space plan by citing the example of Hong Kong (per capita: 2 sq m per person), but Pandit said the comparison is erroneous. “At 6,480 people per sq km, Hong Kong’s population density is a quarter of Mumbai’s.”
The study also shows a dilution of the standards established by rules and bodies like the guidelines for Urban Development Plan Formulation & Implementation (UDPFI) and the Delhi Development Authority (DDA). Compared to the DP’s open space proposition, the prescribed UDPFI norm is 10 sq m per person. As for the Delhi Development Authority, the norm is 4 sq m per person.
“It means open space for every Delhiite will be twice that for a Mumbaikar. The quality of life for everybody in Mumbai will be affected by lowering planning standards and the effects will be felt for the next twenty years and perhaps beyond,” said Omkar Gupta, director (public forum and projects), UDRI. “The study doesn’t divulge how the BMC arrived at the open space calculation and pegged it far below the recommended standard of the UDPFI.”
Weak absorption and rising inventories in the residential market here may lead to price correction in Mumbai in the early part of 2014, real estate consultancy firm Knight Frank said in a recent report.
Nearly 2.9 lakh residential units are under construction in the city while unsold units stood at 1.3 lakh during the January-September period, Knight Frank said in a report.
“The weakening real estate prices suggest that long- standing stalemate between buyers and builders is finally turning in the buyers’ favour. The increase in inventories coupled with weakening absorption levels would put further pressure on prices,” its research director Samantak Das said.
Mumbai’s unsold inventory level is almost 44 per cent in comparison to NCR’s which stands at 26 per cent even with twice the number of units under construction, the report said.
Owing to weakening demand, new launches in the city plummeted over 40 per cent compared to peak levels in 2010 as developers shift focus on liquidating current inventories.
As many as 47,488 residential units were launched during January-September.
“The residential market has been witnessing a steep decline in new launches as well as demand. Unsold inventory pressure in Mumbai is the highest among all other cities and is depicting a growing trend. We expect a more pronounced price correction which may drive the market to a better equilibrium,” he said.
The current environment will put pressure on prices in the medium term and the scenario is expected to last till the forthcoming general elections.
Further, the rise in interest cost and decline in net profit in 2013 will compel developers to lighten load and de-leverage their balance sheets.
“Major listed companies have defaulted their loans this year, which depicts significant stress levels on their balance sheets. Developers are now trying to salvage the situation by limiting fresh launches and boost sales by promotional activities to avoid reducing the base price.
“Overall, the right time for buyers to expect good deals in the market,” company’s national director Mudassir Zaidi said.
MUMBAI: Dilapidated buildings don’t tell when they will collapse, observed the Bombay high court on Wednesday while asking a section of residents of a building in Lower Parel why they have refused to vacate it.
A division bench of Justice V M Kanade and Justice M S Sonak heard a petition by Hare Krishna Builders alleging inaction by Maharashtra Housing and Area Development Authority (Mhada) to evict the non-cooperating tenants of a 90-year-old dilapidated building, which is likely to collapse. The petition said while 70 per cent tenants of Deen Building had vacated the premises, 39 tenants were not cooperating with the builder. The court had earlier directed Mhada to hear the developer and the non-cooperating tenants.
On Wednesday, Mhada advocate told the court that the hearing was complete and an order had been passed. But he sought time saying its joint chief officer of the repair board was not available. The 39 tenants intervened saying they wished to be heard in the matter. The judges questioned why they were not vacating the building. They also referred to the Kalwa building crash on November 18 saying it was a “fortunate” escape because of a vigilant resident. “All the tenants were saved because of an alert tenant who came home late. In such cases the building is not going to tell when it will collapse,” remarked Justice Kanade.
The court was informed by the advocate of the 39 tenants that the developer did not comply with condition of intimation of disapproval and did not construct the post office which was supposed to come up on the plot. “You are not worried about your life but of the post office,” said Justice Kanade. The judges said all issues would be examined in their entirety and adjourned the hearing to December 3.
MUMBAI: A 27-year-old woman, who allegedly duped a Mahim resident of Rs 24 lakh after promising to sell him an SRA flat two years ago, has been arrested. The accused, Maria D’souza, was produced before a court on Tuesday and was remanded in police custody till November 29.
The police said that the complainant, Browne Cardos (48) approached them recently after he realizing that D’souza had cheated him. The accused, a former call centre employee, lied that she would give him the possession of the flat in 2011. She was avoiding him for the past two years after receiving the money from him, said the police. Cardos filed a complaint at the Vakola police station last week after she refused to transfer the flat in his name. She reportedly showed him her inability to return the money stating that she had lent it to her relatives.
The police said that Cardos approached D’souza after learning that she wanted to sell an SRA flat at Vakola. She agreed to sell him it for Rs 28 lakh. The complainant paid her Rs 24 lakh in March, 2011 after she promised him that she would complete the flat transfer formalities soon and hand over him its possession. Soon, she started avoiding him under one pretext or another.
The police said that Cardos requested her to return his money stating that he no longer had trust in her. She was also avoiding his phone calls for last few months. The complainant was upset with the development and approached the police. The police learnt that the flat was registered in her father’s name and its work was not completed. Finally, D’souza was arrested on Monday.
The state government will challenge a High Court order that asked it to get rid of the norm of obtaining prior consent from residents for projects involving integrated development of slums into townships.
In its September 24 order, a division bench of Chief Justice Mohit Shah and Justice M S Sankelacha had asked the government to “make special provisions allowing the government to appoint a developer without such consent” for such projects. Existing redevelopment norms require the developer to obtain consent from 70 per cent slumdwellers before permission for construction is granted.
The state has decided to move Supreme Court in this regard. A senior government official said withdrawal of the consent norms would go against the spirit of the slum rehabilitation policy. It could also block land for a developer for long periods, he added.
A senior government official said the Slum Rehabilitation Authority (SRA) and the housing department were preparing grounds for challenging the court order.
The court had argued that the consent norm was only helping slum lords and was in no way beneficial to individual slumdwellers. “In the last 17 years, the SRA has allotted 1,524 slum redevelopment projects, but only 197 of these (less than 13 per cent) have been completed. It has been brought out that ascertaining eligibility and obtaining consent of slumdwellers is a herculean task. If a developer is required to ascertain the eligibility of slumdwellers for rehabilitation and obtain their consent for development, considerable time, energy and money is consumed in the process,” the court said.
The court’s observation were part of a 55-page judgement in a case pertaining to a project involving rehabilitation of about 7,000 slumdwellers and spread over 1.89 lakh sq m in Borla in Chembur.
The project, undertaken by Nilesh Modi-promoted Sterling Building Pvt Ltd, was given the go-ahead by former Chief Minister Ashok Chavan on November 11, 2010. After taking over the reins, CM Prithviraj Chavan revoked the permission.
The approval was given under the controversial section 3K (1) of the Maharashtra Slum Areas (Improvement, Clearance, and Redevelopment) Act, 1971, which grants discretionary powers to the government and SRA on matters including slum redevelopment schemes. The court had quashed the revocation order. The government will challenge the revocation, sources said.
The residential property market in Mumbai is turning in favour of buyers with inventory levels rising and prices weakening. Residential property prices in some south and central Mumbai locations such as Parel, Lower Parel and Mahalaxmi have declined nearly 10% over the previous three quarters with the increase in the number of unsold homes and prospective buyers reluctant to exceed budgets amid a slump, said property consultancy Knight Frank India.
Developers have been open to negotiation, especially in the premium segment, reducing prices up to 25% for a sizeable upfront payment. Prices in Navi Mumbai, Thane and the peripheral suburbs of central and western Mumbai have either been stable or have trended marginally upward, said the consultant.
“On the residential front, the rise in interest cost and decline in net profits during 2013 will compel developers to lighten inventory load and deleverage their balance sheets,” said Shishir Baijal, CMD, Knight Frank India. “Demand, however, is likely to remain subdued over the initial part of 2014 as the market continues to bottom out against the backdrop of a sluggish economy,” Baijal said. Approximately 47,488 units were launched in the January-September period, a sharp 28% drop from a year ago. The difference is even greater at 42% and 46%, when compared with the same period in 2011 and 2010, respectively.
It is quite evident that developers are keeping new launches in check in order to bridge the supply and demand gap,” said the report. Rising inventory levels have been a pressure point for realty developers across the country, especially in Mumbai, India’s most expensive property market. Nearly 290,000 residential units are under construction in the Mumbai residential market while unsold inventory levels are close to 130,000. “The fact that the unsold inventory level in the Mumbai Metropolitan Region is almost 45% while that in the National Capital Region (NCR) is 26% gives a perspective of the dire situation of the Mumbai residential market, considering that the NCR has nearly twice the number of units under construction compared to Mumbai,” the report said.
Unsold inventory constitutes units in ready as well as under-construction projects. For some time now, property brokers have highlighted delays in project deliveries with the economic slowdown eroding demand. The gap between prices of under-construction and ready apartments has widened to its highest and is as much as 100% in some instances due to delays and uncertainty in approvals, apart from other reasons.
Knight Frank India is of the view that the Mumbai office property market is bottoming out.
Mumbai-based realty developer, HDIL, had a Rs 12,043-crore inventory last financial year, while its net sales stood at Rs 1,025 crore, implying an inventory-to-sales ratio of 12:1.
HDIL is not alone; Mumbai’s residential market, the biggest in the country in value terms, is seeing an unusually high unsold inventory level. About 130,000 of the city’s 290,00 under-construction residential properties (45 per cent) are lying unsold due to weak demand and high prices, shows a report released by global property consultant Knight Frank on Tuesday.
Though the number of under-construction units in the National Capital Region (NCR) is twice that in Mumbai, the unsold inventory level in the former, at 26 per cent, is much lower. In Bangalore, the level at present is about 35 per cent. “This explains the dire situation of Mumbai’s residential market,” the consultant said. The stress is so much that Mumbai requires nearly nine quarters to clear its unsold inventory, while Bangalore and NCR need less than six quarters.
“We expect a more pronounced price correction in Mumbai which may drive the market to a better equilibrium,” said Samantak Das, Knight Frank’s chief economist & director (research).
The slowdown in real estate has also led companies like HDIL and Orbit Corporation to defaulting on loans taken earlier this year from non-banking financial companies, such as Indiabulls Housing Finance and LIC Housing Finance.
The Mumbai real estate markets’ stress has also led to decline in stock prices of listed players. So far this financial year, the shares of city-based HDIL, Orbit and Hubtown have fallen 57 per cent, 72 per cent and 34 per cent, respectively. The BSE Realty Index has declined 37 per cent during the period.
Most of the unsold inventory comprises apartments priced at Rs 2 crore and above — around 52 per cent of unsold homes are in this price bracket. Knight Frank said developers were open to negotiations, especially in the premium segment, reducing prices by up to 25 per cent for sizeable upfront payments.
Other consultants paint an even grimmer picture. Ashutosh Limaye, head of research at Jones Lang LaSalle, estimates unsold units in the Mumbai Metropolitan Region at 60 per cent of all under-construction and ready properties.
According to Pankaj Kapoor, chief executive of realty research firm Liases Foras, Mumbai has an inventory of over 150 million sq ft. “Mumbai needs 1.5 million homes, but the city can’t sell more than 40,000 flats a year due to high prices,” Kapoor says. Developers, it seems, are taking note of unsold inventories. The number of units launched in the city between January and September this year has come down by 28 per cent, on an year-on-year basis, to 47,500 units. The absorption of units during this period has fallen 26 per cent, according to Knight Frank.
Lalit Kumar Jain, president of Confederation of Real Estate Developers Association of India (Credai), however, said the unsold inventory was not very high, given that developers sold only 50 per cent of their inventory during the construction stage and 20 per cent during the completion stage.
But he admitted sales were down due to a negative sentiment. “Prices are higher than prospective buyers’ budgets and inflation and higher interest rates are also hurting buyers,” he said. Jain added the large number of investor transactions in Mumbai might not have been captured by unsold inventory data.
Meanwhile, a report released by HDFC Securities on Monday, said property registrations in Mumbai and its suburbs had seen a 19 per cent jump in October 2013 to 4,900 units. The increase was due to continued registrations of properties sold from 2010-11 to 2012-13, under revised development control rules, the report said.
At 35,948 so far this financial year, the number of registrations has been nine per cent more than 33,142 in the same period last year. This was led by 20 per cent year-on-year growth in Island City registrations; the growth rate in Mumbai suburbs was a muted six per cent, the report said.
“…We expect fresh sales/transaction volumes to remain tepid, as developers continue to hold prices in the face of deterioration in volumes,” said Adidev Chattopadhyay, analyst at HDFC Securities.
MUMBAI: Flawed planning, poor execution and the overwhelming task of rehabilitating the project-affected people have delayed several infrastructure projects in Mumbai, resulting in subsequent cost over-runs.
Many people feel that the time-overrun in projects can be prevented by scientific planning with the involvement of the citizen groups. Consumer activist A V Shenoy said, “There are basically two reasons for the delay in the relocation of project-affected persons (PAPs) and lack of approval before the commissioning of the project. All relevant permissions need to be in place much in advance so that lack of approvals do not hinder the progress of the project.”
A flawed model is also reason for non-execution of the project. RTI activist Anil Galgali said, “We have the example of the Trans-harbour corridor, where the state government failed to attract bids. The other is the case of the underground tunnel at Kalanagar. MMRDA now feels it may not get bidders as the imported technology will make the project unviable. Such factors need to be taken into consideration before planning a project.”
A senior bureaucrat also cited the lack of specialists in urban bodies like the MMRDA, CIDCO and BMC for the poor planning. The official said, “We have either engineers who have risen through the ranks, or appointees from the civil services, who may not have the insight of an expert.” He suggested that these bodies should have a sufficient number of urban planners who can realistically design a project so that it can be executed in the least possible time. He cited the example of the Santa Cruz-Chembur Link Road (SCLR), which has faced several issues related to PAPS, as well as faulty design as the Railways refused to approve the plan. He said all these could have been avoided if a specialist were handling the project.
A reputed consultant associated with many infrastructure projects said, “I feel that land is precious in Mumbai and people like to hold on to it by approaching the courts to prevent acquisition. This is one of the biggest reasons for delayed projects as unless right of way is given, the project can’t move ahead.”
He further said a project should only be executed if there is right of way. An MMRDA official said, “This is one of the reasons that the MMRDA is thinking of an underground Metro. It will prevent litigation arising out land acquisition and thus speed up the project.”
The delays are symptomatic of the way the public sector functions in India; the approach is casual, the planning is tardy and accountability is zero. One way of solving the problem is to levy prohibitive financial penalty on agencies and officials for the delay, which should be several times the cost overrun.