The Urban Development Department of Maharashtra has passed an Order on 15 October 2024 under the Maharashtra Regional Town Planning Act, announcing the establishment of an electronic platform to streamline Transferable Development Rights (TDR) transactions. The new system aims to resolve inefficiencies and delays caused by the current manual, peer-to-peer method of Development Rights Certificate (DRC) transfers.
Current Challenges in TDR Transactions
Under existing practices, the Special Planning Authority (SPA) or Urban Local Bodies (ULBs) compensate landowners with DRCs when acquiring reserved plots. These DRCs grant TDRs, which can be sold or transferred to another party. However, individuals not involved in the construction industry often find it challenging to sell TDRs, and those looking to purchase TDRs face difficulties in identifying sellers and determining fair market prices.
The lack of transparency and accessibility in the TDR market has caused project delays, increased costs, and uncertainty in timelines. To address these issues, the Government of Maharashtra has recognized the need to rationalize the TDR system and provide better incentives for developers and landowners to opt for TDRs over cash compensation.
Key Features of the New Electronic Platform
The electronic platform to be managed by the Brihanmumbai Municipal Corporation (BMC) will offer several features aimed at enhancing transparency and efficiency in TDR transactions:
- Dematerialization of DRCs: All DRCs will be dematerialized, ensuring easier and more secure transactions.
- Mandatory Registration: DRC holders and potential buyers must register on the platform, completing a Know Your Customer (KYC) process similar to banking procedures.
- Transaction Flexibility: Registered parties can engage in TDR transactions, with DRC holders proposing sales and buyers expressing interest without needing direct relationships.
- Transparent Marketplace: The platform will help buyers and sellers discover fair market prices, increasing market transparency.
- Transactions Outside the Platform: While off-platform transactions are allowed, they must be reported and validated within a specified time frame.
- Open to Individual Buyers: The platform will allow societies and flat owners to purchase DRCs for regularization or expansion, without the need for brokers.
- Involvement of Financial Institutions: Banks and financial institutions will record TDR financial transactions, ensuring a safe and regulated process.
- Integrated Legal Compliance: Sale deed registration, payment of charges, and other legal processes will be handled directly through the platform.
The BMC will charge transaction fees for using the system, which is expected to be operational within three months. The platform will eventually be expanded across Maharashtra, making it mandatory for all DRCs to be registered and dematerialized.
Conclusion
This new electronic platform is expected to make TDR transactions more transparent, efficient, and accessible, helping to reduce project delays and improve the overall effectiveness of the TDR system in Maharashtra. Once implemented, the platform will offer landowners, developers, and individual buyers a secure and transparent marketplace, setting the stage for a more streamlined development process in the state.