Builder defaults on Rs 680 cr rent to slum dwellers in Mumbai, Real Estate News, ET Real Estate

Mumbai: three months later Slum Rehabilitation Authority (SRA) published a list of builders of 150 projects where slum dwellers Rents have not been paid as part of their rehabilitation plans, with only a few builders clearing their dues. As per the SRA’s estimate, out of the cumulative outstanding rent of Rs 700 crore, only Rs 20 crore has been paid.

After the SRA notice, which was issued in September, urging builders to pay the rent, only 15-20 defaulting builders have come forward to pay the rent, and about Rs 680 crore The arrears of rent are still due.

The SRA had asked builders of 150 projects to pay rent to slum tenants and submit an affidavit to the authority within a month. According to estimates, there are at least 50,000 families in these 150 SRA projects who have not received rent for several months; years in any case.

SRA CEO Satish Lokhande The agency is running a special drive to ensure rent to the slum dwellers.

SRA says amnesty scheme can help rent flow, revive projects

With builders continuing to default, the Slum Rehabilitation Authority (SRA) is running a special drive to ensure rent to slum dwellers.

“We were getting complaints about non-payment of rent, so this time we have launched an intensive drive. We have also introduced an amnesty scheme under which financial institutions can come together and restart stalled or closed projects. For new or web dead projects that have been revived, we have made it mandatory for builders to pay 11 months advance rent and submit post-dated checks for three years. Furthermore, we are doing a detailed analysis of the financial capability of the builder to complete the project and pay the rent. SRA CEO Satish Lokhande said, “We are not approving projects until these conditions are met.”

Officials said rents for slum tenants vary depending on the project, ranging from around Rs 12,000 to Rs 20,000 per unit. The quantum of rent has been agreed upon between the slum dwellers and the builders. On an average, there are five persons in each slum unit, so the total number of persons affected by non-payment of rent is around 2.5 lakh.

“Most of the 150 builders who have not paid rent are in large schemes with a minimum of 100 tenants. Some of the larger projects have more than 2,000 tenants. Once the slum dwellers vacate their house, they are entitled to a fixed monthly rent from the builder till they get a new house in the rehabilitation component of the SRA project. The builder also makes the sales component and this cross-subsidises slum rehabilitation, said an official.

“As far as changing developers is concerned, we are taking a balanced approach as there are genuine market related and financial issues. We are now using a three-pronged approach to revive and complete all 517 stalled or dead projects and provide new homes to slum dwellers. We will soon float tenders to appoint builders and complete dead projects and are also going for a Joint Venture (JV). MHADA Where SRA will pay the rent. With the amnesty scheme starting, we expect rents to start coming in and projects to revive, Lokhande said.

Around 2.06 lakh families have got new apartments in the 24 years since the formation of the SRA. According to SRA estimates, there are 12.50 lakh slums in the city, in which 62 lakh people live. Despite the COVID-19 pandemic, in the last 2.5 years, a record number of approvals were given, while the highest number of slum rehabilitation units were also completed.