SRA flats: everything you need to know

SRA flats: everything you need to know

In December 1995, the Maharashtra government established the Slum Rehabilitation Authority (SRA) to aid in the rebuilding of slums throughout Mumbai. While the original recipient of an SRA project is allowed to sell the property, there are some rules that must be followed. The concept and lays out the requirements for buying an SRA apartment.

Let's start by defining an SRA flat and how it differs from any other type of unit.

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What is an SRA flat, exactly?

Slum inhabitants are provided with tenements, often known as SRA apartments, by the Slum Rehabilitation Authority. There are two types of SRA flats: those that a slum dweller receives after surrendering his current home and those that builders sell on the open market.

Mumbai's landscape is littered with slums. "Roughly 60% of the city's population lives in slums.

The Maharashtra government passed the Maharashtra Slum Areas (Improvement, Clearance, & Redevelopment) Act, 1971 to improve the living conditions of slum inhabitants. Slum improvement projects were outlined in the statute.

The State government revised the aforesaid statute to provide for the creation of the SRA after many years, based on the recommendations of the Afzulpurkar Committee. The authority was founded as a result of a government directive dated December 16, 1995.

Only slums created before 2011 are eligible for rehabilitation, according to the criteria. A real estate developer interested in redeveloping a specific slum approaches the slum's cooperative housing society, which is made up of slum residents. To start the reconstruction and rehabilitation process, builders require the approval of at least 50% of the slum dwellers. The developer relocates the residents to transit camps or rents them temporary housing until the slum is renovated after gaining consent and completing the relevant documentation.

The developer then demolishes the slum, develops new structures, and after that, all eligible slum occupants receive free housing. The carpet area of the refurbished residential unit will be 300 square feet. The extra space on the plot is used to construct structures, and developers are allowed to sell units in them on the open market, recouping their redevelopment expenses and, in some cases, even profiting.

After receiving a rebuilt property, the recipients are unable to sell or rent it until the 10-year lock-in period expires. The State government is entitled to a part of the sale value if the beneficiary sells it after ten years. This is known as a transaction fee, and it will be required for the sale documents to be registered. The cost will be equal to the property's stamp duty, or Rs 1 lakh, whichever is more. The transfer fee cap for commercial and industrial tenements will be Rs 2 lakh & Rs 3 lakh, respectively.

Criteria for purchasing an SRA apartment   

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A domicile certificate is required for the purchase.

The buyer and their family should not possess a home inside the boundaries of the Brihanmumbai Municipal Corporation (BMC).

The purchaser must be from the Economically Weaker Section (EWS), the Lower Income Group (LIG), or the Middle Income Group (MIG) (MIG). If applicable, the selling deed will be in both husband and wife's names. SRA houses cannot be purchased by partnership firms or organisations.

An SRA flat cannot be purchased by the original beneficiary.

What is the procedure for purchasing SRA apartments?

SRA can provide you with a No-Objection Certificate (NOC).

The authority's office can provide you with a transfer application form. You must submit the following papers together with the completed form:    

Certificate of residence Copy of three-year Income Tax Return (ITR) NOC to purchase the land from the slum's respective cooperative housing society Certificate of no dues from the housing society

When you submit the above-mentioned documents, SRA will review them and issue the NOC accordingly.

Register the deed of sale.

Execute the property sale deed and get it registered at the Sub-Registrar of Assurances' office by paying the necessary stamp duty and registration fees. For this reason, you will need the following documents:

      

SRA's approval Deed of sale The seller's electric bill Copy of the housing society's certificate of no dues The buyer's and seller's PANs and Aadhaar cards are required.

Certificate to share The property's OC (Occupancy Certificate)

Submit the documents to SRA Send a copy of the stamped sale deed, along with the application form as well as the authority's NOC, to the SRA. SRA will send you a letter informing you that you will be required to pay transfer fees. SRA will issue three NOCs when you make the payment: one for the buyer, one for the seller, and one for housing society.

Submit documents to the respective housing society Submit the whole set of documentation to the housing society in question and pay the transfer fee (if any). You will become a new member of the housing society & the owner of an SRA flat after the society stamps the share certificate.

What is the procedure for obtaining an SRA apartment loan?

Experts point out that a house loan may only be obtained for the purchase of an SRA unit when the lock-in period has ended and all necessary building approvals have been obtained.

"Applying for a home loan does not require any additional steps. It will be handled similarly to any other house loan. The due diligence team will oversee the completion of all background checks. Muralidhar, a Bangalore-based financial consultant, adds that consent from the SRA authorities is also required.

Risks involved Buying an SRA flat appears to be a profitable home alternative. There are, however, some dangers associated. According to one-third among all SRA flats are occupied unlawfully. To make money, the slum recipients have either sold or rented their flats as soon as they acquire possession, which is against SRA regulations.

Buyers who cannot afford city residences purchase these flats unlawfully using a Power of Attorney (PoA) rather than a sale deed in which they sign a mutual understanding affidavit regarding the transaction. It's important to remember that a buyer in this situation is not qualified for a house loan.

Most asked questions about SRA flats How can I learn more about SRA projects?

Follow the steps below to find SRA projects:  

Visit the Slum Redevelopment Authority of Mumbai's official website at https://sra.gov.in/dashboard.

Click the 'Scheme Information' link under the 'Citizen Services' menu. You will be sent to a third-party website. This website contains a list of SRA projects, their addresses, & the names of the developers and architects involved. This web page also contains documents related to each project.

Is the ten-year lock-in period still in effect for SRA flats?

The State Housing Department suggested in February 2020 to reduce the 10-year lock-in period to five years. The plan was based on proposals from a cabinet subcommittee established in 2017 to look into the rules governing the sale and acquisition of SRA assets. Over 13,000 SRA unit owners broke the lock-in period rules and resold their homes between 2011 and 2017. As a result, the Maharashtra government has proposed a shorter lock-in period.

However, the regulation is currently in effect, and the 10-year lock-in term continues.

Is the SRA scheme only for Mumbai residents?

The redevelopment scheme was initially only applicable in Mumbai. On March 17, 2016, the authority approved a slum restoration project for land under Thane Municipal Corporation's jurisdiction (TMC). Section 3B (3) of the Maharashtra Slum Areas (Improvement, Clearance, & Redevelopment) Act, 1971 was used to accomplish this. As a result, the SRA scheme is also valid in Thane. For additional information, call the authority's Thane office at 022 25842900 or 022 25843900.

What are the features of an SRA apartment?

Builders must enter into a tripartite agreement with slum dwellers & the respective cooperative housing association before beginning the redevelopment process. The slum redevelopment authority has made the agreement's format available on its website. The minimal facilities that a developer must give in a redeveloped property are mentioned in the annexure section of the Agreement. Among the most important are:    

Every tenement will have its own water and energy supply.

All fittings must be of acceptable quality and certified by the Indian Standards Institute (ISI).

The floors in each flat will be vitrified tiles or a comparable substitute.

The kitchen platform will be granite/marble, with a stainless-steel sink & glazed tiles up to 900 mm in height.

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