They used to charge for free FSI and didn't tell you; Now the BMC has snatched the freebies, but that still does not mean good news for you
They used to charge for free FSI and didn't tell you; Now the BMC has snatched the freebies, but that still does not mean good news for you
ADVERTISEMENT
The civic body's proposed amendment to guidelines for builders has been met with angry glares, both from the builder community and the buyers, but for different reasons.
It has raised the builder's hackles with the news that the BMC will now charge them extra for the FSI for the super built-up area (see box) they were getting gratis until now. 
And it has astonished the buyers by exposing some of the builders' sleight of hand in their truck with buyers, who were being charged for the very same free amenities.
The proposed amendment to the Development Control Rules (DCR), 1991, by the Municipal Commissioner, lays down that a 100 per cent premium will be charged for the free FSI that the corporation grants to builders for balcony, flower beds and other such spatial amenities.
Others, such as staircase and lobby, which were charged 25 per cent premium earlier, have also been hiked to the same premium rate.
u00a0
The expressly displeased builder fraternity's knee-jerk reaction to the news that only carpet area would come free now was to hike prices, as they would have to pay more to the corporation for the built-up FSI.u00a0
Treasurer of the Builder Association of India, Anand Gupta, asserted, "The money that the builder will have to pay for the staircases, flowerbeds, balconies will be an extra burden on his pocket. This will be passed on to the buyer by increasing the sale price."
Gupta further said that the government, instead of putting unwanted pressure on the builder, should come up with plans of increasing the housing stock.
'Serves them right'
But civic officials ridicule the objections.
They say builders have no right to raise real estate prices, because all this while, they have been selling the buyer the flowerbed and the balcony and what have you which came to him for free.
u00a0
In effect, they imply that the rules are actually in favour of the buyers, provided they understand that they were being led up the garden path all this while.
BMC Commissioner Subodh Kumar is clear that prices of buildings wouldn't be increased, because all this while, the buyer had been paying the builder for the FSI that he was given for free.
"We found that most of the space for balconies, flowerbeds and such was taken inside the home and converted into livable area, thus flouting the norms.
The buyer already has been paying the builder for it in spite of the builder getting it for free. There has been a misuse of the free FSI.
u00a0
Now the buyer and builder can sell the flowerbed, balcony and other amenities and pay us the premium for the FSI," said the commissioner.
A senior BMC official said, "It's time buyers realise that builders, all this while, have been charging them for something that was meant to come to them for free. We need to be educated on this part.
u00a0
There wouldn't be a rise in prices if the buyer understands this.
If the builder is being charged for something that was free until now, which he had been charging the buyers for, then what extra costs is the builder incurring? He has anyway been charging the buyer."
BMC's Standing Committee Chairman Rahul Shewale also believes that builders have no reason to hike the price.
u00a0
"There is no reason for the builder to take more from the buyer, as buyers have already been paying the builder for the flowerbed, balcony and other amenities.
And even if there is a rise, it should not be more than 5-6 per cent," he said.
This time, even realty experts claim that the builders are behaving greedily. "When the builders sold the buyer the complimentary amenities, did they ever inform the buyer that they were for free?
When there was no refunding to the buyer, why should the buyer be charged more now if the builder is being made to pay?" said Sreedhar Sharma, founder, Revathi Memorial, an NGO for issued relating to real estate.
Advocate Vinod Sampat, president, Cooperative Societies Welfare Association, said, "Builders never pay a penny from their pocket. Since they must pay for the FSI now, they would turn towards the buyers."
Minister speaks
Sachin Ahir, state housing minister, however, swears by the profit motive of capitalism. "Builders would definitely hike the price, and it would be wrong.
But they are here to make profit, not do social work. My only concern is that these amendments shouldn't bring a stop to the projects."
Subscribe today by clicking the link and stay updated with the latest news!" Click here!
