25 projects delayed in Mumbai as BMC; developers have a dispute over the development charges

The BMC and developers spar over-development fee in the residential-cum-commercial project, because of this around 25 mixed-use housing projects in Mumbai are incomplete. The ready reckoner rate of development charge for residential use is 4%, whereas, 8% for commercial. The vital revenue source for BMC is the development charges. The Maharashtra Regional Town Planning act permits the charge to be imposed on predominant use, BMC has been forcing to charge proportionately. A developer can save crores if the predominant system is applied, especially in large projects. 

 

Realtors say, whenever they apply for a mixed-use development project to be charged on the rate of predominant development, which is residential, the BMC officials insist they obtain an order from the court. A techno-legal expert, Sathyen Prasad said that it is a loss to the state exchequer as the Brihanmumbai Municipal Corporation, with a legitimate team at its disposal, prefers to fight it out, regardless of the repetitive knocks by courts.

 

The Bombay High court, in its two recent orders, has asked BMC to use the predominant formula to charge the residential rate. Borivali’s project for Incline Realty, where 74% is provided to residential, and the court referred to the law officer of BMC, who was against the development charges at a commercial rate. BMC refused the developer’s appeal to recover the charges at 4%.