Saturday, November 19, 2011

Extra FSI for redevelopment? Clarity on complex issues and concerns related to real estate, laws and taxes

Extra FSI for redevelopment?

Clarity on complex issues and concerns related to real estate, laws and taxes



I had purchased a flat in my and my borothers names. My brother has not contributed any amount towards the purchase and entire purchase price was paid by me. Only I have been paying all maintenance and outgoings and my brother has never resided in the flat. The purchaser is insisting that in the agreement for sale my brother also need to be one of the co-vendors whereas my brother is not co-operating. My brother is a joint share holder. What is the basic legal position?
More often than not, a flat is purchased by a person in his name as well as joint name of a family member. Under such circumstances, in the absence of a contrary understanding, their co-ownership rights are in proportion to the funds contributed by each of them. In your case, you have funded the entire cost of acquisition but have added name of your brother in purchase document. Now that you have decided to sell off such flat, question has arisen that even though you are 100% owner of the flat, can you sell the same without signature of your brother who did not contribute any funds towards acquisition but whose name appears as the co–owner?
Sale will not be possible without the signature of such other co–owner because what are the proportions of co-ownership rights is an internal matter of the co-owners but as far as the purchaser is concerned the title stands in the joint names and the same cannot pass on without the joint signatures. In such a situation if your brother refuses to sign the sale documents then sale will not be possible without approaching competent court.
When a flat is purchased in joint names, application for membership in the co operative society may be made by co purchasers and share certificate may also come in their joint names but they will not be joint members in the co operative society. A person whose name appears first in the share certificate is the ordinary member whereas the person whose name appears at second or subsequent number in the share certificate is an associate member in the society.

We are a co-operative housing society contemplating redevelopment. Whether development control regulations have been modified to increase FSI by .33 without buying TDR? How is the mechanism of .33 additional FSI going to work?

The notification dated 24-10-2011 has certainly increased the additional FSI but that is only an option in place of use of TDR with the result that the aggregate of 'FSI-cum-TDR FSI' has not increased. Thus, if the development potential of your plot is "2" by use of TDR FSI, the same will remain at "2" only with the difference now that FSI of "1" would be your existing FSI, additional FSI of .33 can be purchased from municipal authority at a premium and .67 FSI can be consumed by purchase of TDR. The premium rates of .33 additional FSI are comparatively far lower than the market rates of the TDR. To that extent the .33 FSI has become very economic and such additional FSI would reduce the market demand of TDR and therefore in the process the market rates of TDR have started coming down. So far as the co-operative housing societies are concerned, some of the salient features of the new .33 additional FSI are as follows.
l Additional 0.33 FSI is optional and non-transferable. It is to be granted as on application and to be used on the same plot.
l The total maximum permissible FSI, with 1.33 FSI, Road FSI and TDR shall be restricted to 2.00.
l As per concept of TDR, additional FSI shall be permissible on gross plot area.
l Additional FSI available as per Regulation 33, shall be related to basic FSI of 1.00 only.
l In Mumbai Suburban District, construction up to 1.00 additional FSI is permissible through use of TDR. 0.33 FSI being optional and part of overall ceiling of use of 1.00 TDR, any disclosure made for use of TDR/ FSI, while making agreements with purchasers under MOFA Act, shall be held valid for use of 0.33 FSI.
l No vertical extension of existing building by utilizing 0.33 FSI shall be permitted with erection of columns in the required marginal open space.
l The relaxation of premium i.e.10% of normal premium shall be charged while condoning deficiencies in open spaces (as applicable for use of slum TDR).

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