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In a major development in Mumbai's real estate landscape, the Slum Rehabilitation Authority (SRA) has taken a stringent stance against defaulting builders who owe a staggering sum of approximately Rs 620 crore in rent to slum dwellers. In a recent circular issued by SRA CEO Satish Lokhande, the agency has barred these developers from submitting fresh proposals for new projects until their outstanding dues are cleared.
The circular explicitly outlines that proposals from defaulting developers, firms, and their partners or directors who have not settled transit rent payments will be outright rejected. This unprecedented move by SRA implies that builders with a history of non-payment to slum dwellers will find their ambitions of initiating new SRA projects put on hold.
Going forward, the SRA is implementing a more stringent approach to rent payments. Developers will now be required to deposit two years' worth of advance rent, along with post-dated cheques for the remaining period of project completion, right from the project's inception. This initiative aims to ensure that rent payments are met consistently and transparently.
Furthermore, the circular asserts that defaulting developers and their associates will not be eligible for appointment as developers, even with the consent of the society, in ongoing slum rehabilitation projects where previous developers have been terminated. The circular also outlines that developers must furnish a phase-wise demolition schedule for the slum structures involved in the project.
Similar strict measures apply to developers who have failed to provide project-affected persons (PAP) or permanent transit camp (PTC) tenements to SRA. These developers will also be prohibited from submitting new project proposals to the SRA.
The SRA's decision comes in the wake of two public interest litigations (PILs) in the Bombay High Court related to transit rent and PAP and PTC tenements. The High Court has expressed dissatisfaction with the status quo and directed the SRA to take immediate and proactive measures to address the non-payment issue.
This move follows the publication of a list by SRA last year, naming 150 builders involved in 150 projects who had failed to fulfil their rental obligations to slum dwellers as part of their slum rehabilitation initiatives. Despite this, only a handful of builders stepped forward to settle their dues. As per SRA estimates, the outstanding rent amounts to nearly Rs 620 crore, owed by approximately 150 builders to the slum tenants.
Although the SRA's notice issued in September prompted a small number of defaulting builders to pay up an aggregate sum of Rs 18-20 crore, the bulk of the outstanding rent, totalling Rs 620 crore, remains unpaid. The circular signals the SRA's commitment to rectify this situation and ensure more equitable and transparent practices in Mumbai's slum rehabilitation projects.
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