Govt extends instalment facility on premiums payments

The Urban Development department in Mumbai has granted a three-year extension to state agencies for the instalment facility for premiums payable under Regulations 30, 31(3) and 33 of the Development Control Promotion Regulations 2024. This move is expected to bring relief to developers who had requested for an extension. However, they will have to pay the first instalment of 10% of the premium amount for proposed buildings up to 70 m in height before the IOD and Commencement Certificate (CC) are issued.

MUMBAI: In a major relief to developers, the Urban Development department on Wednesday granted an extension to the instalment facility for premiums payable under Regulations 30, 31(3) and 33 of the Development Control Promotion Regulations 2024 to the state agencies like Mumbai Metropolitan Region Development Authority (MMRDA), Maharashtra State Road Development Corporation (MSRDC), MHADA and Dharavi Redevelopment Project (DRP) for three years.

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The Brihanmumbai Municipal Corporation (BMC) had given the instalment facility of payment of premiums to developers on September 4, 2019, for two years. On Monday, the chief engineer, BMC informed the government that the civic body had extended the facility till September 3, 2025.

The Practising Engineers, Architects and Town Planners Association (PEATA) and CREDAI-MCHI, the developer’s body representing 1,800 developers, had also made representations in April-May 2022 requesting the government to extend the instalment facility for another three years.

A UD directive issued on Wednesday said the extension will be valid from September 4, 2021, for three years and the terms and conditions in the BMC notification will be applicable for other agencies as well.

Compared to other cities, in Mumbai, developers have to pay more than 32 different premiums to different government agencies. “In Hyderabad, developers pay just three premiums, while builders in Delhi pay five, and in Bengaluru, they pay 10 different premiums. Developers say the premium costs make homes unaffordable for home buyers and discourage investments due to high establishment costs.

According to the UD directive, developers will now have to deposit the first instalment of 10% of the premium amount for proposed buildings up to 70 m in height before the IOD and Commencement Certificate (CC) are issued. Thereafter, they will have to pay four equal instalments of 22.5% by the end of the next 12 months, 24 months, 36 months and 48 months.

Similarly, for the instalments for buildings above 70 m in height, 10% of the premium amount will have to be paid before the IOC-CC, and thereafter six equal instalments of 18% of the premium will have to be deposited at the end of the next five years.

“The premiums need to be paid with interest to the government and the government agencies. Any violation will attract action as per BMC notification,” the UD note said.

“The premium deposited at MCGM gets divided into 2 parts, 50% to MCGM and 50% to GoM. As per the MCGM circular dated 6.9.21, the facility of the instalment was only applicable to the MCGM 50% share. The premiums were charged at 50% of Land ASR (ready reckoner) rates with no concession which was proving to be a hurdle for the progress of projects. Hence, CREDAI-MCHI had requested the Maharashtra government to extend the instalment payment scheme on the premium payable to the state government. The Government has kindly agreed for the same which will bring a lot of relief to the projects across MMR,” said Dominic Romell, President, REDAI-MCHI