Builders to pay 3 year advance rent

Mumbai: In major relief to flat-owners or occupants of housing societies which may undergo redevelopment, the builder will have to deposit three years’ rent in advance. This is another major announcement made by Chief Minister Devendra Fadnavis on Friday. “The builder will have to deposit 3 years’ rent in an escrow account,” the chief minister announced in the Assembly. This decision will help check errant builders, bring some succour to thousands of families and also indirectly pressurise the builder to complete the project within a stipulated time period. But this decision may not apply to ongoing projects.

Currently, over 85% constructions in Mumbai, mostly old and dilapidated buildings, are entrusted for redevelopment. But this redevelopment exercise has turned out to be a nightmare for many residents as buildings are demolished and occupants are offered rent for alternate accommodation. But later, as has happened in case-after-case, the developer stops paying rent and many-a-times virtually abandons the projects citing financial difficulties or regulatory issues.

In January 2018, MahaRERA had asked flat-owners to go to another forum for non-payment of rent by a builder in a redevelopment project. “MahaRERA is not the proper forum to resolve grievances pertaining to non-payment of rent raised by the complainant,” was the judgement by MAHARERA chairman Gautam Chatterjee. In most redevelopment projects, flat-owners face serious problems due to non-payment of rent by builders.

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Free Press Journal