Real Estate

Maharashtra builders seek changes in licence agreement rules

Press Trust of India Mumbai | Updated on January 24, 2018 Published on May 19, 2015

Trying times Building firms want to rent out their unsold flats as‘service apartments’ in a desperate attempt to clear inventories

Builders, amid the struggle to sell their luxury apartments due to poor demand, have now approached the Maharashtra government seeking changes in the Leave and Licence Agreement rules in a desperate bid to clear inventories.

They are now seeking to rent out their unsold flats as ‘service apartments’, for those intending to take homes on rent for a short span of time, to earn some money during the current slowdown in the market, according to a State Housing department official.

However, no formal proposal has come from the builders in this regard. But, if they come up with some concrete proposal, the Housing department may consider it, he said.

“There are currently five lakh luxury homes unsold in the city. When these flats are not sold, builders are unable to repay banks and other financiers their loan amount. To get respite in the prevailing condition, builders have approached us saying they want to rent out their flats as service apartments for which they want the Leave and Licence Agreement tweaked,” the official said.

The prices of unsold homes in Mumbai run into crores of rupees, forcing people to opt for homes in neighbouring areas such as Thane, Navi-Mumbai and Vasai-Virar, he said.

“Thus, the builders have come up with a new way to earn money now and repay their debts. For instance, if the cost of an apartment is ₹2 crore, they will give it on a monthly rent of ₹30,000. The builder will start a full-fledged service for these apartments where the needs of the tenant will be taken care of by the company,” the official said.

Services such as requisite furniture, cleanliness, maintenance of the apartments, water and parking facilities will be provided by the builder to the residents, he said.

“The rents from these apartments will reduce their financial burden considerably. At the same time, it will be a new option for those who want apartments for a short period of time, but do not want to pay exorbitant prices,” the official said.

Published on May 19, 2015
This article is closed for comments.
Please Email the Editor