Lease agreement with SRA developers will help get money from lenders

Housing Minister Jitendra Awhad on Saturday announced that the government would speed up all Mumbai slum redevelopment projects. delay due to funding and other related factors.

SRA Director General Satish Lokhande explained that the land belongs to the government and that during its redevelopment, part is intended for rehabilitation while the other is for sale.

“The lease of the agreement was not before what we are doing now. In the lease, SRA will be the lessor, and the developer will be the lessee for the free sale component and for the rehabilitation part, the company will be. the tenant. Appropriate documentation of the land title will take place, ”he said.

Obtaining funds for developers as funding has been a major cause for concern in such projects. “A political decision is at the government level. Supposedly, said SRA developer is a tenant of the salable part and wants to make it freehold. In this case, he can apply by paying a premium to the government and getting a loan. for the project. However, this policy is at the stage of reflection and decision-making. “

For a builder having a convention lease will ensure the crystallization of the title.

“This will make the availability of bank loans easier for developers, which was otherwise a difficult task in slum redevelopment projects,” said builder Vimal Shah, managing director of Hubtown Ltd (formerly Ackruti City Ltd) who has carried out several slum redevelopment projects. in Bombay.

He explained that funds to construct rehabilitation buildings only reach the developer through sale. “Therefore, although the lessor of the rehabilitation part is owned by the company, the lessor of the salable part will be the developer from which the capital investment comes. Therefore, generating funds will become easy,” he said. he adds.

Many industry experts have praised the government’s decision to streamline the issues. “A formal lease of the agreement will provide more clarity to developers. Today developers face various issues when implementing an SRA project, while a lease agreement will help solve two major issues: legal and financial. There are hundreds of SRA projects that are stuck at various stages. If there is a formal deal, then many cash trapped projects can be lifted as they will get a better financial option, ”said Kaushal Agarwal, chairman of The Guardians Real Estate Advisory.

However, tenants of the slum redevelopment projects have raised questions about the government’s move. The president of the Golphadevi SRA Hsg Society cooperative, Sharad Koli in Worli, said there should be good clarity.

“Although SRA does this to bring in funds, but if a developer delays the project after being leased, how will the company take them out of the project? Also, it was stated that on the rehabilitation part, the company (the tenants ) be the tenant, but for the sale part, the developer will supposedly be the tenant, if said developer fails to do the rehabilitation project, how the tenants of a particular slum project will appoint another developer. the free sale component? The project will become financially unsustainable because the lessor of the salable part would be with the previous promoter not doing the job properly, and the company wants to withdraw it. How will such situations be handled? “

Meanwhile, according to reports, nearly 250 SRA programs in Mumbai are currently languishing due to various factors. Although the SRA program started in 1996, but it is progressing at a slow pace and has failed to make Mumbai a city without slums due to issues such as corruption, strife and strife intestines between slum dwellers and developers, alleged political vendetta, vested interests, and regulatory issues among others.

This paper previously reported on research conducted by international real estate consultant Knight Frank on the Mumbai 2034 development plan – Deciphering Mumbai’s Future in November 2018 – which found that of the 1.5 to 1.6 million of households in the slums of Mumbai, only 1 lakh of houses had been built. for slum dwellers over the past 20 years.

In addition, the report leaked in 2019 indicated that at this rate, if it continues, it will take another 300 years to rehabilitate the slums of Mumbai, provided that no new slums are added.

(To receive our electronic paper daily on WhatsApp, please click here. We allow sharing of the PDF document on WhatsApp and other social media platforms.)

Posted on: Monday November 15, 2021, 8:21 PM IST

Source link

About Rhonda Lee

Check Also

Carter Post Vets: We Were Neglected at Mattapan Sq. Rehab

It’s hard to miss Sgt. William E. Carter American Legion Post 16 on Blue Hill …