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mhada: MHADA reduces interest on delayed payments of development charges to 12%

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The Maharashtra Housing and Area Development Authority (MHADA) has decided to reduce the penal interest charged on delayed payments of installments against various premiums to be paid in respect of building permission in the redevelopment projects of MHADA from the existing 18% to 12% annually.

The decision comes into effect following the directions issued by Maharashtra’s Deputy Chief Minister Devendra Fadnavis.

The minister had recently, at a NAREDCO conference, voiced concern over the level of interest charged by the state government’s housing body from realty developers and had stated the need to lower the same to bring it at par with that of the Municipal Corporation of Greater Mumbai (MCGM).

As per the instructions issued by Fadnavis and directives given by Minister of Housing Development Atul Save, MHADA’s Vice President & CEO Sanjeev Jaiswal had asked the officers concerned to review and take necessary action in this matter.

Alongside, in accordance with the given directives, a proposal was immediately drafted to reduce the interest on delayed payments of installments against various premiums from 18% to 12% for the redevelopment projects.

According to Jaiswal, a proposal has been submitted to the Urban Development Department of the Maharashtra government to further reduce this interest rate too.Realty developers expressed that the decision will help homebuyers, the industry and the state’s economy.”The government’s proactive approach in resolving issues that are impacting the homebuyers and the industry will help in improving the ease of doing business in the state. We had raised the issue with deputy CM just 10 days ago and it has already been resolved,” Sandeep Runwal, President, NAREDCO Maharashtra, told ET.

It may be recalled that the Maharashtra government has granted MHADA the status of a development authority with control over 114 layouts in the Greater Mumbai region. MHADA holds jurisdiction over the land and the authority to regulate the same.

For the redevelopment of old MHADA properties, permissions are being processed through three independent departments at MHADA headquarters: the layout approval section, the building permissions department for the Greater Mumbai area, and the urban housing scheme under the Prime Minister’s housing scheme.

The building permission department carries out its activities adhering to the provisions in the Maharashtra Region and Town Planning Act of 1966. On this background the decision to reduce the penal interest on delayed payments of installments against various premiums to be paid in respect of building permission in the redevelopment projects of MHADA from the existing 18% to 12% annually has been taken on lines of provisions made in BMC circular of 27th September 2022.

Jaiswal indicated that as per Section 124 (e)(3) of the MRTP Act, the development charges for the redevelopment projects come under the category of development premiums. As per the provisions in this act, in the case of delays in payment of these charges by developers, an annual interest rate of 18% was being applied.

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