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Key Takeaways

  • To improve the living conditions of slum dwellers, the Maharashtra Government passed the Maharashtra Slum Areas (Improvement, Clearance, and Redevelopment) Act, 1971.
  • The Act included provisions for slum improvement projects.
  • The Maharashtra Government established the Slum Rehabilitation Authority (SRA) in December 1995 to assist in the redevelopment of slums across Mumbai.
  • When purchasing an SRA Flat, there is a specific procedure that must be followed.
  • The Maharashtra Slum Area Act 1971 and the Development Control Rules (DCR) regulations state that one cannot buy or sell a flat for ten years after the date of receiving the possession letter.

Introduction

To assist with the redevelopment of Mumbai's slums, the Maharashtra Government established the Slum Rehabilitation Authority (SRA) in December of 1995. While the property can be sold by the original beneficiary of an SRA project, several rules must be followed. This article aims to examine the Scheme and the requirements for purchasing and transferring an SRA flat.

SRA Flats

Mumbai's landscape is littered with slums. It is estimated that around 60% of the city's population lives in slums. The Maharashtra Government passed the Maharashtra Slum Areas (Improvement, Clearance, and Redevelopment) Act, 1971, to improve the living conditions of slum dwellers. Slum improvement projects were outlined in the Act.

The State Government amended the stated Act to provide for the creation of the SRA after many years, based on the recommendations of the Afzulpurkar Committee. The Authority was established as a result of a government order dated December 16, 1995. As the rules stipulate, only those slums built prior to 2011 can be remediated. A developer interested in the redevelopment of a particular slum neighbourhood approaches the housing cooperative of the residents of that neighbourhood.

Before carrying out any redevelopment or rehabilitation, at least 50% of the slum dwellers must grant consent. Once the consent has been received, and all of the required paperwork has been completed, the developer moves the residents to transit camps or offers temporary lodging for rent until the slum is redeveloped. Once the slum is demolished, the developer constructs new buildings, after which the entire eligible population receives free housing. The unit will have a carpeted floor area of 300 square feet. In order to recover the redevelopment costs and even earn a profit in some cases, developers are allowed to build structures on the plot in the extra space.

There is one Act and two Rules which govern the rules and regulations of the working of SRA. They are:

  • The Maharashtra Co-operative Societies Act, 1960
  • Cooperative Societies Rules, 1961
  • The Multi-State Cooperative Societies Rules, 2002

In the case of Awdesh Tiwari v. Chief Executive Officer Slum Rehabilitation Authority and Others (supra), WP-12156-2019, the Division Bench of Bombay High Court explained the relevant provisions of the Maharashtra Slum Areas Act, 1971 and the Development Control Regulations for Greater Mumbai, 1991 pertaining to the Scheme of rehabilitation of slum dwellers.

The Authority

The Chief Executive Officer is in charge of the SRA. The Chief Minister of Maharashtra serves as the organization's Chairperson. The other members of the Authority are the State Housing Minister, Urban Development Minister, Commissioner of the Municipal Corporation of Greater Mumbai, and the Principal Secretary of the Urban Development and Housing Department.

The Government has also launched a GIS portal, where citizens and other relevant stakeholders can view data collected by the Brihanmumbai Municipal Corporation to make Mumbai slum-free by 2022. These maps include layers of data such as administration wards, boundaries, and scheme information based on HUT ID, village, taluka, ward, cluster, and landmark parameters.

Transfer of SRA Flats

The restriction has been imposed on the beneficiary of the flat under the SRA scheme, according to the provisions of Section 3 (E) of Maharashtra Slum Area Act 1971 and Appendix – IV para 1.18 of 33 Development Control Rules (DCR) regulations, who cannot purchase or sell the flat for ten years from the date of receiving possession letter.

In order to purchase an SRA flat, the buyer must submit a domicile certificate. According to the SRA guidelines, which the State Government has approved, both the seller and the buyer of SRA dwellings will be barred from buying or selling such homes in the future. After purchasing a home in an SRA building, neither the buyer nor the original seller will be able to transact in any other SRA project. They will also be unable to apply for a new home through any other government programme.

According to the Rules, anyone interested in buying an SRA apartment must also be a resident of the state and not own a home within the boundaries of the Brihanmumbai Municipal Corporation (BMC). It is also stipulated that the buyer must be from the Economically Weaker Sections (EWS), the Lower Income Group (LIG), or the Middle-Income Group (MIG). Also, wherever possible, the sale deed will be in both husband and wife's names.

A properly stamped registered sale deed is required to transfer ownership of the property. In the absence of that, one will not get a valid title to the property. In the event that the beneficiary chooses to sell the asset after ten years, the government of the state where the asset is located is entitled to a share of the proceeds from the sale. In the registration of the sale documents, this is called a transaction fee and it will be necessary. The fee will be equal to the stamp duty or will be Rs 1 lakh, whichever amount is higher. The transfer fee cap for industrial and commercial tenements is Rs 2 lakh and Rs 3 lakh, respectively.

The procedure of purchasing an SRA flat

There is a pre-defined procedure to be followed when a purchase of any SRA Flat is made:

1. No-Objection Certificate (NOC) from the SRA

The transfer authority's office can provide an application form for this purpose. Once the form is completed, the following supporting documents must be submitted:

  • Proof of domicile.
  • A complete copy of one's ITR for the previous three years.
  • A letter of non-objection from the respective cooperative housing society.
  • Certificate of No-dues from the housing society.

When the documents mentioned above are submitted, the SRA will review them and issue the NOC as needed.

2. Registering the sale deed

The sale deed is to be executed for the property, and it is to be registered by paying the applicable stamp duty and registration fees to the concerned office of the Sub-Registrar of Assurances.

The documents required for this purpose are:

  • The No-Objection Certificate from SRA.
  • The Sale Deed.
  • The electricity bill of the seller.
  • A copy of the no-dues certificate issued by the housing society.
  • Permanent Account Number and Aadhaar Card of both the buyer and seller.
  • The Share Certificate and the Occupancy Certificate of the property

3. Submitting the documents to SRA

A copy of the stamped sale deed, as well as the application form and the Authority's NOC, must be submitted to the SRA. The SRA will issue a letter informing of the required payment of the transfer fees.The SRA issues three NOCs, one for the buyer, one for the seller, and one for the housing society, once the payment has been received.

4. Submitting documents to the housing society

The full set of documents is to be submitted with the concerned housing society as well as the payment of its transfer fee (if any) is to be made. The share certificate is then stamped which makes the buyer a member of the housing society and the concerned SRA flat owner.

Conclusion

A profitable housing option, buying an SRA flat, appears to be purchasing an SRA flat. While many precautions can be taken, there are some risks to be aware of. One third of all SRA (short-term residential) units are estimated to be illegally occupied. While the regulations at SRA strictly forbid beneficiaries from selling or renting out their apartments while they are in possession of them, beneficiaries have found various ways to monetize their apartments. When you sell or purchase an SRA flat, care must be taken to avoid illegalities. It is hoped, however, that the future conditions for these SRA schemes will improve public awareness with an improved application of SRA rules and regulations.

Questions:

  • What is the lock-in period after which an SRA Flat can be sold or bought?
  • Which Act was enacted with the motive to improve the living conditions of the slum- dwellers?

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