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No advantage for flat buyers

mumbai Updated: Aug 02, 2011 01:24 IST
Naresh Kamath
Naresh Kamath
Hindustan Times
Highlight Story

The new building approval rules that the civic body unveiled recently will not give Mumbaiites looking to buy new property any advantage when it comes to cost.

The Brihanmumbai Municipal Corporation's (BMC) new rules restrict the common spaces in a building to 25% of the total constructed area. Secondly, it demands the builder pay for the Floor Space Index (FSI) used to construct these common spaces.

FSI is the ratio of permissible built-up area to the size of the plot it is built on. It is an indicator of how high a building can be constructed. In the previous rule, common areas such as staircases, flowerbeds, ducts and the refuge floor were not counted in the FSI of a building.

However, builders were including these areas - for whose construction they didn't pay for - in the super built-up area of a flat and charging consumers for it.

The new rules will help the BMC earn money for something it was giving to developers free of cost, but they will not help people struggling to buy homes as property prices sky-rocket.

Earlier, developers got to construct all spaces except the staircases free. For the staircases, the charge was 25% of the rate published in the state ready reckoner; now there will be no discount.

The BMC expects to make an average of Rs 3,000 crore a year now.

Activists and experts believe builders will simply pass on the burden to buyers. "The builders never leave an opportunity to fleece consumers. With this premium, homes are bound to get costlier," said Ramesh Prabhu, chairman, Maharashtra Societies Welfare Association (MSWA).

Shreedhar Sharma, president of Revathy Foundation, an NGO that deals with housing issues, said the new rules would make no difference as builders continue to violate older rules. "Builders sell flats as per the super built-up area [this includes open spaces apart from the actual area of a flat] though it is unlawful," said Sharma. "Even the sale of parking spaces is prohibited, but builders do that with impunity."

Paras Gundecha, president of the Maharashtra Chambers of Housing Industry, confirmed that builders would pass on the burden to consumers.

"We cannot go on putting our money. We will definitely recover it from consumers," said Gundecha.

The new rules are a good idea, said environmentalist Debi Goenka. "Currently, in the name of amenities, the builders are manipulating rules and constructing more than the permissible limit. This causes immense strain to the infrastructure. The new rules will give a perfect idea of the built-up area, which in turn will determine the infrastructure needed," said environmentalist Debi Goenka.

Consumers will benefit only once the state government puts in place the much-awaited regulatory authority on housing. The plan for a regulator was announced five years ago. However, the legislation to create the authority has not been enacted. It is expected to keep a tab on pricing of residential properties and redress buyers' grievances.

Real estate advocate Vinod Sampat said the pressure from the builder lobby was delaying the formation of the body. "Builders will lose
their clout and cannot arm-twist buyers if a regulator is in place," said Sampat.

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