Additional FSI & TDR for societies

Vimal C. Punamiya, Chartered Accountant

1. Before understanding additional FSI and TDR it is a must to understand the concept of TDR.
The Bombay Municipal Corporation (BMC) entrusted with the task of making user of the available land as per the requirements and need felt by the citizens if required to make optimum utilisation of the scarce available land. For implementation of this task under overall development plan the plots are demarcated according to varying land use and for various public utilities under the various plan of the BMC. The Government publishes the priority list every year on the basis of which they demarcate lands / plots in different categories.
The BMC had to face great difficulties in implementing it’s target of using the plot for the purpose for which it is demarcated and meant.
Thus in order to overcome the difficulties faced by the BMC the concept of TDR (Transferable Development Rights) was introduced. This concept was first mooted in the development control rules of 1991. It allows a property owner the right to construct an additional 40 percent floor area over and above the permissible limits under the existing FSI (Floor Space Area). The owner (or lessee) of a plot of land which is reserved for a public purpose in the development plan and for additional amenities deemed to be reservation provided in accordance with these Regulations, excepting in the case of an existing or retention user or to any required compulsory or recreational open space, shall be eligible for the award of Transferable Development Rights (TDRs) in the form of Floor Space Index (FSI). Such award will entitle the owner of the land to FSI in the form of a Development Right Certificate (DRC) which he may use himself or transfer to any other person.
It gives the owner/lessee the right to transfer excess development potential from an ‘Originating Plot’ (which can be in the island city or the suburbs) to a ‘Receivable Plot’ (which is only in the suburbs and always north of the originating plot).
Originating Plots are those which fall under reservations like recreation grounds, playgrounds, schools, markets and roads in the development plan and are handed over to the BMC free of cost, in lieu of which FSI in the form of TDR, is granted and allowed to be used on the receivable plots. The FSI allowed is .4 against reservation and .4 against roads.
In short TDR is a form of FSI which entitles a land owner to construct additional building on his land. Under TDR, reserved plots are surrendered to BMC for development. Further TDR can be availed only where the individual or corporate entity has a vacant plot of it’s own.
2. The main requisites for obtaining TDR are :
1. Identifying the land under reservation.
2. The land should be in the receiving zones.
3. Acquisition of the particular land by obtaining Development Right Certificate (DRC).
Until the court ruling last year the FSI could not exceed .4 on a receivable plot, however there was a court ruling that .8 FSI could be allowed (clubbing road and reservation TDR) on the same plot.
In a city like Mumbai, where space shortage is a major problem the concept of TDR is very much welcomed by the Builders, Developers and Landlords which are stipulated as under :
2.1 The owner (or lessee) of a plot of land which is reserved for a public purpose in the development plan and for additional amenities deemed to be reservations provided in accordance with these Regulations, excepting in the case of an existing or retention user or to any required compulsory or recreational open space, shall be eligible for the award of Transferable Development Rights (TDRs) in the form of Floor Space Index (FSI) to the extent and on the conditions set out below. Such award will entitle the owner of the land to FSI in the form of Development Right Certificate (DRC) which he may use himself or transfer to any other person.
2.2 Subject to the Regulation 1 above, where a plot of land is reserved for any purpose specified in Section 22 of Maharashtra Regional and Town Planning Act, 1966 the owner will be eligible for development Right (DRs) to the extent stipulated in Regulations 5 and 6 in this Appendix had the land been not so reserved, after the said land is surrendered free of cost as stipulated in Regulation 5 in this Appendix, and after completion of the development or construction as in Regulation in this Appendix if he undertakes the same.
2.3 Development Rights (DRs) will be granted to an owner or a lessee only for reserved lands which are retainable / non-retainable under the Urban Land (Ceiling and Regulations) Act, 1976, and in respect of all other reserved lands to which the provisions of the aforesaid Act do not apply and on production of a certificate to this effect from the Competent Authority under that Act before a Development Right is granted. In the case of non-retainable lands, the grant of Development Rights shall be to such extent and subject to such conditions as Government may specify. Development rights (DRs) are available only in cases where Development of a reservation has not been implemented i.e. TDRs will be available only for prospective development of reservations.
2.4 Development Rights Certificate (DRCs) will be issued by the Commissioner himself. They will state, in figures and in words, the FSI credit in square meters of the built-up area to which the owner or lessee of the said reserved plot is mentioned, the place and user zone in which the DRs are earned and the areas in which such credit may be utilised.
2.5 The built up area for the purpose of FSI credit in the form of a DRC shall be equal to the gross area of the reserved plot to the permissible FSI of the zone where from the TDR has originated.
2.6 When an owner or lessee also develops or constructs the amenity on the surrendered plot at his cost subject to such stipulations as may be prescribed by the Commissioner or the Appropriate Authority as the case may be and to their satisfaction and hands over the said developed/constructed amenity to the Commissioner / Appropriate Authority, free of cost, he may be granted by the Commissioner, a further DR in the form of FSI equivalent to the area of the construction / development done by him, utilisation of which etc. will be subject to the Regulations contained in this Appendix.
2.7 A DRC will be issued only on the satisfactory compliance with the conditions.
2.8 If a holder of a DRC intends to transfer it to any other person, he will submit the DRC to the Commissioner with an appropriate application for an endorsement of the new holder’s name i.e. transferee on the said certificate. Without such an endorsement by the Commissioner himself, the transfer shall not be valid and the certificate will be available for use only by the earlier original holder.
2.9 A holder of a DRC who desires to use the FSI credit certified therein on a particular plot of land shall attach to his application for development permission valid DRCs to the extent required.
2.10 Irrespective of the location of the land in which they originate, DRCs shall not be used in the Island city. They may be used –
(a) On any plot in the same ward as that in which they have originated (neither ward being in the Island city), or
(b) On any plot lying to the north (wholly or partially) of the plot in which they have originated (but not in the Island city).
2.11 A DRC shall not be valid for use on receivable plots in the areas listed below :
(a) Between the tracks of the Western Railway and the Swami Vivekanand Road;
(b) Between the tracks of the Western Railway and Western Express Highway.
(c) Between the tracks of the Central Railway (Main Line) and Lal Bahadur Shastri Road;
(d) On plots falling within 50m. on roads on which no new shops are permitted as specified in Sub-regulation (2) of Regulation 52.
(e) Coastal areas and areas in No Development Zones, Tourism Development Zones, and areas for which the Bombay Metropolitan Region Development Authority or Maharashtra Housing and Area Development Authority is the Special Planning Authority.
(f) On plots for housing schemes of slumdwellers for which additional FSI is permissible under Sub-regulation (10) of Regulation 33;
(g) Areas where the permissible FSI is less than 1.0.
2.12 DRCs may be used on one or more plots of land whether vacant or already developed or by the erection of additional storeys, or in any other manner consistent with these Regulations, but not so as to exceed in any plot total Built Up FSI higher than that prescribed in Regulation 14 in this Appendix.
2.13 The FSI of a receiving plot shall be allowed to be exceeded by not more than 0.4 in respect of a DR available in respect of the reserved plot as in this Appendix and upto a further 0.4 in respect of a DR available in respect of land surrendered for road-widening or construction of new roads according to Sub-regulations (1) of Regulation 33.
2.14 DRs will be granted and DRCs issued only after the reserved land is surrendered to the Corporation, where it is Appropriate Authority, otherwise to the State Government as the case may be, free of cost and free of encumbrances, after the owner or lessee has levelled the land to the surrendering ground level and after he has constructed a 1.5m. high compound wall (or at a height stipulated by the Commissioner) with a gate at the cost of the owner, and to the satisfaction of the Commissioner, or the State Government (where the Corporation is not the appropriate authority). The cost of any transaction involved shall be borne by the owner or lessee.
2.15 With an application for development permission, where an owner seeks utilisation of DRs, he shall submit the DRC to the Commissioner who shall endorse thereon in writing, in figures and words, the quantum of the DRC proposed to be utilised, before granting development permission and when the development in complete, the Commissioner shall endorse thereon in writing, in figures and words, the quantum of the DRC proposed to be utilised, before granting development is complete, the Commissioner shall endorse on the DRC in writing in figures and words, the quantum of DRs actually utilised and the balance remaining thereafter, if any, before issue of occupation certificate.
2.16 A DRC shall be issued by the Commissioner himself as a certificate printed on bond paper in an appropriate form prescribed by the Commissioner. Such a certificate will be transferable as “Negotiable Instrument” after due authentication by the Commissioner. The Commissioner shall maintain a register in a form considered appropriate by him of all transactions etc. relating to grant of utilisation of DRs.
2.17 The surrendered reserved land for which a DRC is to be issued shall vest in the Corporation or the State Government, if the appropriate authority is other than the Corporation, and such land shall be transferred in the City Survey Records in the name of the Corporation or the State Government, as the case may be, and shall vest absolutely in the Corporation or the State Government. The surrendered land, so transferred to the State Government in respect of which the Corporation is not the appropriate authority, may, on application, thereafter be allotted by the State Government in favour of the concerned authority, which may be a State or Central Government Department, authority or organisation on appropriate terms as may be decided by the State Government.
2.18 The Commissioner / Appropriate Authority shall draw up in advance and make public from the time to time a phased annual programme (allowing a development) for utilisation of TDRs in the Form of DRs, prioritizing revised (draft or sanctioned) development plan reservations to be allowed to be surrendered and indicating the areas for their utilisation on receiving plots. Notwithstanding this, in urgent cases, the Commissioner / Appropriate Authority, may, for reasons to be recorded in writing, grant DRs, as and when considered appropriate and necessary.
Though apart from the aforesaid regulations and the BMC insistence that light and ventilation and additional parking have to be duly provided in TDR Projects.
However, the plight of the common citizens who are faced with TDR problem are pathetic and needs serious considerations by the Government authorities.