Maharashtra Societies redevelopment fund corpus queries

I stay in Vile Parle. We live in a tenanted house from the last 50 years. We came to know that our landlord has sold the building in which we live but not told anything to us. We want our place to be redeveloped and to become ownership. Does he have the power to vacate us?

Since you are staying as a tenant for the last 50 years, you are a protected tenant and nobody can vacate you without adopting due process of law. The land owner need not inform you about the sale of his property to new developer/ new owner. Whoever be the new owner, he cannot compel you to vacate. In the course of redevelopment, the developer or new owner has to give you the new premises in the new building and during the construction period, he has to pay you the rent also. There is a trend that whenever a tenanted building is redeveloped, the tenants are also given the ownership rights in the new premises without any extra area or corpus. The tenants cannot claim the ownership in the new building under any provisions of the law but to have the smooth redevelopment, the land owners/ developers give ownership flats to the tenants in the new building. The developer/ new owner cannot make any demand of money or compensation from you.

We own a 1000 sq ft flat in a chawl system. Though originally the land belonged to some trusts we do pay regular taxes to the government for the place we live in. Still it is tagged as illegal property. I would like to know if we are eligible to claim for the flat if any development project comes up in near future.

Normally, during the redevelopment, the builder has to consider all the legal and illegal structures and take up the project. As you have stated, in case the builder tries to avoid you or does not promise the house in the new building, you may move the application to the competent court and get the stay on the entire redevelopment process. Most of the chawls in Mumbai are not having proper approval and are considered to be illegal. However, since they are paying government taxes and the structure is before 1995, the owners of such structures are given houses in the redevelopment. The area you are occupying may not be given to you. You may get the area as specified in the Development Control Rules under which your builder is carrying out the redevelopment. For example, if it is developed under slums provision, you may get only 269 sq. ft. If it is under cess building provision, you may get between 300 sq. Ft. and 753 sq. ft., provided it is in the city. The best idea would be negotiate with the developer when they approach to you for redevelopment. If the redevelopment is not possible without demolishing your area, the builder will have to approach you and then proceed for redevelopment. In case due to being termed ‘illegal structures’, if you are asked to vacate or issued any notice, you have to engage a very good advocate and proceed legally to have new house against the surrender of old house.

Ours is a 57 individual bungalows co-operative housing society, which is tenant co partnership type. Please advise whether we can have our individual bungalow converted to ownership basis? If yes, then who is the authority to implement above changes and what is the procedure involved? Can individual bungalow type society be redeveloped to multi-storey type housing society with few members opting to stay in their existing bungalows?

The society has to call a general body meeting and take a decision to give lease rights or ownership rights of the land appurtenant (plot area of the respective bungalow) to all the bungalow owners. Without the general body meeting, it is not possible. The same should be passed by two-third majority. In case the managing committee does not implement the above changes, you can request the Registrar to call a special general body meeting with the above agenda. Before approaching the registrar, at least 20% of the members should make an application to the committee with the above agenda to call the Special General body meeting (SGM). Within one month, if the committee does not call the SGM, then you can approach the registrar who will appoint an authorized officer to decide on the agenda. Once a decision to allot the respective plots to the respective bungalow owners and permit individual bungalow owners to redevelop the same by the society, the interested bungalow owners can proceed to redevelop the same. In case, only one or two bungalow owners want to develop and have ownership, the aggrieved member has to approach the appropriate legal forums after exhausting all recourses like making an application to the committee, requesting the general body and then to the registrar of the society.

What will be the Income Tax Treatment of the rent, corpus fund (hardship compensation) and shifting charges paid to a society member by the builder during redevelopment?

As per the many latest judgments given by the Income Tax Tribunal, Mumbai, the corpus fund/ Hardship compensation is not taxable as there is no cost of acquisition. In case of rent received during the temporary accommodation, if the entire rent compensation received is for alternative accommodation, the same is not taxable. In case, no rent is paid or if any amount is saved from the rental part, the same is taxable under income from other sources. Shifting charges will not be taxable as the same will be naturally spent by the member to shift the belongings to the new place.