Mumbai: Days after the Maharashtra Government’s decision on 50 per cent reduction in premium to provide much needed relief to the realty sector, which has been hit hard by Covid-19 crisis and economic downturn, it will be binding on the developer to individually give an undertaking to the BMC, in order to avail the benefit.
“As per the government notification issued by the state government on January 14, 2021, 50 per cent reduction in premium is to be given to the developer/owner for payment of premium as regards 0.5 additional FSI... While giving reduction in premium, the state government has laid down conditions to be observed and followed by the developers. The BMC has already prepared a format of registered undertaking,” said a senior officer from the urban development department.
The officer said that the government’s decision would be applicable till December 31, 2021. Developers desirous of availing the concession on premium will have to pay stamp duty for their customers in entirety, till December 31 this year.
The undertaking to the BMC will have 10 conditions, including that of the developer agreeing to pay the entire stamp duty of the prospective buyers for the area for which the 50 per cent reduction in premium is availed. The developers will submit a certificate from the prospective buyers, that the stamp duty has been paid for the latter and the said copy of the certificate and list of buyers will have to be submitted to the BMC.
The list of all the beneficiaries of stamp duty shall be displayed on the developer’s website and be conveyed to RERA and the BMC. The government notification of paying the stamp duty for prospective buyers shall be applicable for the sale of the area on which the benefit has been availed.
The developers will have to declare that they are not defaulters on any instalment/dues which are payable to BMC or the state government.
Further, the developer must declare that ‘I/We shall incorporate a condition in the sale agreement to the effect that 50 per cent reduction in premium facility is availed by me and the same is passed to the prospective buyers in terms of payment of stamp duty of the respective residential/commercial units.” The developers will also have to submit that they will abide by the policy that may come in future or be issued by the BMC/state government and the same shall be binding on them and their legal heirs/executors.
The developers will also declare that they also indemnify BMC and its officers against any litigation that may arise due to the non-payment or any recovery that may arise in future.
The reduction in premium will benefit developers in terms of the reduced construction cost for projects. For customers, it will help reduce prices and boost demand. As far as the government is concerned, it will help increase premium and levy collection, as the move is likely to revive projects in limbo.