Redevelopment woes: Ugly face of Mumbai realtors

By I C Naik

Developers and redevelopment are in news with State Government chipping in decisively. Earlier, reports of consumer Forums taking on erring builders and developers for not farming housing society or conveying title deeds kept coming in.

After a long wait of nearly 15 years the news of liberalized FSI of 3 as compared to existing 1 in SoBo and a few sub-urban areas is music to the ears of flat owners as also to developers.  Alongside this Bombay High Court has started taking on redevelopers quite sternly for unfair and literally fraudulent acts to the grave detriment of residents, in this State has poised itself as a blind witness.

A much publicized Reality Regulator is not being spotted by the State Administration. One wonders whether the reality sector will ever come in to sync. A story of the full time reality developer has also been caught napping and have found itself and HC rap.

TOI (Mumbai) report on Aug 30 2016 narrates a story of HC clipping wings of high-flying bldr who left tenants in lurch. The story opens with these words “Sounding a stern warning to builders who launch redevelopment projects, get residents to vacate their flats and then miss deadlines, the Bombay high court has cracked down on a developer.” A Vile Parle housing society had started redevelopment in 2010 with a developer named Sachin Kelkar who  is yet to hand over reveloped flats.

On 29th August the High Court asked him to deposit his passport and restrained him from selling or parting with his Audi or Mercedes Benz and any property. The economic offences wing of the city police was ordered to probe allegations of fabricated commencement certificates in the project and be ready with a report by September 19. The HC noted that since the builder had failed to pay property taxes, the society property could be auctioned.

The Judge sympathetically remarked that once the residents agree to redevelopment and vacate their premises, they are left at the mercy of the builder whose project, “progresses at a snail’s pace” or is “even abandoned” while they live a lavish life by immediately raking in “crores of rupees” for the “free sale flats”. Builders often stop payment of rent or compensation to the displaced residents, and by the time tenants or residents move court, builders say they “have no assets to offer and are neck deep in debt”.

Hindustan Times also carried a story on the same matter. As per this report the court asked the developer, Sachin Kelkar a pointed question “why he should not be sent to jail for making false statements and for withholding vital information from the court. Very serious matter is according to the Jufge “The Brihanmumbai Municipal Corporation (BMC) had said that two bogus commencement certificates bearing the forged signatures of civic officials were annexed to a sale agreement executed by the developer.

In yet another report the T O I on Sep 03 2016 brought out another alarming fact that the Builders stop paying rent for interim accommodation to tenants and stall projects giving excuse of financial crunch. The report goes on : Redevelopment in Mumbai –whether of tenanted cessed buildings in the island city or housing societies in suburbs –has turned out to be a nightmare for several residents. Buildings are demolished and occupants are offered rents for alternate accommodation. But in case after case across the city (TOI has reported several of them), the developer stops paying rent and virtually abandons the projects, claiming financial difficulties or regulatory issues.” Yet some startling facts reported are:

  • In cooperative housing societies, the builder manages to buy select office bearers and then conspires to delay the project, resulting in losses and ultimate eviction of most members.
  • According to an estimate, more than 5,000 projects are stuck due to frivolous reasons and where rents have been stopped, the condition is pathetic.
  • “When the redevelopment is completed, members find the office bearers responsible for ushering in builders getting extra area, better location, chosen direction, better specifications etcetera. When questioned, the standard replies are given indicating that extra money was paid. There is no way to check the records to prove that the special treatment was not free. An office bearer who runs a printing business was suddenly given printing orders for the builder’s balance sheets,“ he said.
  • Special treatment is meted out to those who help builders usurp lands and buildings acquired by public agencies such as Mhada. TOI has learnt that in one such chawl, one of the supporters of such usurping bought six tenements at a price of one crore rupees each. “How can a person whose known source of income is from running a cable service make this kind of money?“ asked a resident.
  • Anybody opposing is threatened, and sometimes even assaulted as happened in the case of one chief promoter, who refused to toe the line. All this has resulted in total distrust of the developer, his cronies and their methods. But a developer claimed they are sometimes blackmailed and coerced by some society members, who demand more money or “threaten to stall the project.“

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