Mumbai realtors seek DCR on prospective basis

Tough times continue for the realty space and adding to it, are the Mumbai Development Control Regulations or DCR guidelines, doled out five months back. So much so, that both consumers and developers are up in arms against the implementation of the new guidelines, reports CNBC-TV18's Priyanka Ghosh.

In an effort to enhance transparency in property transactions, the state government of Maharashtra had amended the DCR regulations in February this year. Accordingly spaces such as balconies, flower beds and terraces are now a part of the floor space index or FSI and realtors have to pay a premium for these areas. But it seems implementation of these guidelines is easier said than done.

Real estate companies in Mumbai don't get project approvals at one go but in stages. However projects are launched and sold much ahead of getting approvals for every stage. So, when the guidelines changed, the first reaction of companies was to increase the price of apartments. But that created fresh problems as consumers questioned why they should be paying more after sale deeds have already been signed?

Not surprising then that the number of legal suits against builders are on the rise. But pricing is not the only bone of contention. According to developers, it is not possible to change the design of apartments in half constructed buildings in a bid to implement the DCR amendments.  If the design of apartment's changes, consumers do not get the product that they had signed up for. Caught between a rock and a hard place, the developers face a choice to either reduce profitability from projects or face the ire of consumers.

Real estate companies are now up in arms asking the government to apply the rules in a prospective basis. They want these new guidelines to be applicable for only those projects that are yet to be launched. In fact, official sources indicate, real estate bodies such as, Maharashtra Chamber of Housing Industry (MCHI) has been asked to give an opinion to the government on the matter. According to majority industry players in order to protect its own kitty the government is unlikely to budge.