In a move aimed at easing the financial burden on housing societies and developers, the Maharashtra Housing and Area Development Authority (MHADA) has revised its resolution governing the payment of premiums for additional built-up area under Regulation 33(5).
The revised policy now allows developers and societies to pay the premium amount in five or six installmentsdepending on the plot size, instead of the earlier four-installment structure.
This amendment comes in response to representations made by CREDAI-MCHI and aligns MHADA’s payment structure with the Municipal Corporation of Greater Mumbai (MCGM) policy for staggered premium payments.
Key Changes in Premium Payment Structure
| Plot Size | No. of Installments | First Installment | Subsequent Installments | Total Tenure |
|---|---|---|---|---|
| Less than 4000 sq. m. | 5 | 10% within 1 month of LOI | 22.5% each at 12, 24, 36, and 48 months | 4 years |
| 4000 sq. m. & above | 6 | 10% within 1 month of LOI | 18% each at 12, 24, 36, 48, and 60 months | 5 years |
LOI = Letter of Intent
Under the previous resolution (No. 6749 dated July 11, 2017), premiums had to be paid in four equal installments with interest. The revised structure gives developers more time and flexibility, particularly for larger redevelopment projects on MHADA layouts.
Interest & Penal Provisions
- No Interest for One-Time Payment: If the entire premium is paid within one month of receiving the Letter of Intent, no interest will be charged.
- For staggered payments, interest will be charged at SBI’s prevailing one-year MCLR + 2%, either as simple or compounded interest, whichever is higher.
- Penal Interest: In case of delay beyond due dates, a flat 18% per annum penal interest will apply on the outstanding amount.
- If the full premium is not paid within the stipulated timeline of the LOI, the balance amount will attract an additional simple interest of 18% for the extended period.
Why This Matters
Regulation 33(5) of the Development Control and Promotion Regulations (DCPR) 2034 governs redevelopment of buildings on MHADA layouts. Under this regulation, societies or developers pay a premium for additional built-up area, calculated as the difference between existing built-up area and the total permissible FSI.
By extending the premium payment timeline, MHADA aims to:
- Ease cash flow pressure on developers and housing societies
- Encourage smoother redevelopment execution
- Align premium structures with MCGM’s staggered payment model
- Accelerate redevelopment of aging MHADA layouts across Mumbai
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