All You Need To Know About SRA Flats

By Investoxpert | 20 Dec 2023 | Real Estate

The Slum Rehabilitation Authority (SRA) was founded by the Maharashtra government in December 1995 to provide high-quality homes to urban poor people residing in slum areas. A SRA project's original beneficiary may sell the land, but there are a number of restrictions that must be followed. Read on to learn about the process, associated dangers, and advantages of purchasing SRA apartments.

What Is SRA?

The Slum Rehabilitation Authority (SRA) was founded by the Maharashtra government to oversee the reconstruction of the State's impoverished neighborhoods. Since Maharashtra accounts for over 10% of India's slum population, the authority concentrates on redeveloping these regions and providing rehabilitation services to slum inhabitants.

The Floor Space Index (FSI) is used to the land that houses slums in order to generate revenue from it. Through the proceeds from the sale of other apartments on the open market, this enables slum inhabitants to get SRA flats.

In a premium real estate market like Mumbai, buying SRA flats is more inexpensive, which is why more middle-class and lower-class individuals choose to purchase such homes. On the other hand, little is known about the required process, laws, and house loan specifications. In order to make the process of purchasing an SRA apartment easier, read this blog.

What Is A SRA Flats?

Slum inhabitants can get tenements, sometimes referred to as SRA apartments, from the Slum Rehabilitation Authority. SRA apartments come in two varieties: those that builders sell on the open market and those that slum dwellers receive after giving up their current residence.

A common feature of Mumbai's terrain are slums. Slums house almost 60% of the city's inhabitants, according to Mumbai-based real estate adviser Vipin Nayak. The Maharashtra Slum Areas (Improvement, Clearance, and Redevelopment) Act, 1971 was passed by the Maharashtra government in an effort to raise the standard of living for slum inhabitants. Slum improvement projects were outlined in the statute.

After several years, the State government changed the stated statute to include provisions for the establishment of the SRA based on the Afzulpurkar Committee's recommendations. As a result, on December 16, 1995, a government order formed the authority.

How To Buy SRA Flat In Mumbai?

Only slums constructed prior to 2011 are permitted to be converted as SRA apartments, following the regulations. The beneficiary receives the apartment after the property is refurbished, but they are not allowed to sell or rent it for the five years that it is locked in. The following are the main steps in purchasing an SRA apartment:

Assuming you are purchasing an SRA apartment from its prior owner, confirm that the lock-in time has passed.

You must have a domicile certificate in order to purchase a home, and you shouldn't reside inside the boundaries of the Brihanmumbai Municipal Corporation (BMC).

The transfer application form must be properly completed and is accessible at the relevant SRA office.

You can register the apartment after they review your paperwork and provide their approval.

Complete the sale deed and register it at the Sub-Registrar of Assurances' office.

Send the SRA a copy of the application and the stamped sale deed.

You must also give the relevant housing society the paperwork.

What Are SRA New Rules 2023?

Rules governing SRA development

The cooperative housing association made up of the slum inhabitants is approached by a real estate developer who is interested in redeveloping that specific slum. Before starting the rebuilding and rehabilitation process, builders must obtain the approval of at least 50% of the slum dwellers. Once the developer has obtained consent and completed the required documentation, the residents are either relocated to transit camps or provided with rent for interim housing while the slum is developed.

Subsequently, the developer demolishes the slum, builds new structures, and upon completion, all qualified slum occupants receive free dwellings. The renovated residential unit will include 300 square feet of carpet. The extra space on the property is used for the construction of structures, which developers are then free to market and sell to recoup the expenses of redevelopment and, in certain situations, even turn a profit on.

After a renovated property is assigned to the beneficiaries, the property cannot be sold or rented out until the ten-year lock-in period has passed. The State government is entitled to a portion of the sale value if the beneficiary decides to sell it after ten years. This is referred to as a transaction fee and is required in order for the sale documents to be registered. The amount of the cost will be one lakh rupees or the relevant stamp duty on the property, whichever is higher. The maximum transfer fees for commercial and industrial tenements will be Rs 3 lakh and Rs 2 lakh, respectively.

What Is The Eligibility criteria for buying an SRA flat?

The buyer needs to have a proof of domicile.

Within the boundaries of the Brihanmumbai Municipal Corporation (BMC), the buyer and their family members are not permitted to possess a home.

The buyer must be a member of the Middle Income Group (MIG), Lower Income Group (LIG), or Economically Weaker Section (EWS). If relevant, the husband and wife's names will appear on the sale deed. It is not allowed for partnership corporations or organizations to buy SRA properties.

A SRA apartment cannot be purchased by the initial recipient.

Procedures for buying an SRA apartment

Obtain an SRA No-Objection Certificate (NOC).

The authority's office has the application form for the transfer. The following documents must be sent with the completed form:

Domicile certificate

• Three years' worth of copies of your income tax return (ITR);

• A NOC from the slum's cooperative housing society in order to purchase the property;

• A housing society no-dues certificate; once you submit the aforementioned papers, the SRA will review them and issue the NOC in accordance with their assessment.

What Is The Process To Register The Sale Deed?

Execute the property's sale deed and pay the relevant stamp duty and registration fees to get it registered at the relevant Sub-Registrar of Assurances office. Documents are required for:

NOC from SRA
Sale deed
Electricity bill of the seller
A copy of the housing society's no-dues certificate;
The buyer and seller's Permanent Account Number (PAN) and Aadhaar card
Share certificate
Occupancy Certificate (OC) of the property
Submit the documents to SRA

Send the application form, the authority's NOC, and a copy of the stamped sale deed to the SRA. SRA will send you a notification informing you that you must pay transfer fees. Three NOCs—one for the buyer, one for the seller, and one for the housing society—will be issued by SRA after the payment is received.

List Of The Documents To Be Submitted To The Respective Housing Society

Send the complete set of documentation, along with any applicable transfer fees, to the housing society in question. After the share certificate is stamped by the society, you will own an SRA apartment and become a new member of the housing society.

What Is The Process For Getting A Home Loan For SRA Flats?

Experts point out that only when the lock-in period has ended and all necessary construction licenses have been obtained can a house loan be obtained for the purchase of an SRA apartment.

The process of applying for a house loan is not unique. It will be handled just like any other mortgage. The staff responsible for due diligence will guarantee the completion of all background checks. Furthermore, authorization from the SRA authorities is needed.

What Kind Of Risks Are Involved?

Buying an SRA apartment appears to be a profitable home choice. There are certain hazards, though. According to Nayak, a third of the apartments in SRA are occupied unlawfully. In violation of SRA regulations, the slum beneficiaries have either rented or sold their apartments as soon as they obtain possession in order to make money.

Buyers who are unable to afford city real estate purchase these apartments unlawfully by signing a mutual understanding affidavit regarding the transaction using a Power of Attorney (PoA) rather than a selling deed. Recall that the buyer in this type of transaction is not eligible for a home loan.

How To Find Out About SRA Projects?

To determine SRA projects, take the following actions:

Go to the Slum Redevelopment Authority of Mumbai's official website.

Click the 'Scheme Information' link located under the 'Citizen Services' page.

There will be a redirection to another website.

You may see the list of SRA projects, the addresses for each project, and the names of the developers and architects that are engaged on this website.

Documents related to every project are also available on this website.

Is The Lock-In Period Of 10 Years Still Applicable On SRA Flats?

The State Housing Department suggested in February 2020 that the 10-year lock-in period be shortened to five years. A cabinet subcommittee established in 2017 to review the regulations governing the sale and acquisition of SRA assets provided recommendations that served as the foundation for the plan. According to the research, almost 13,000 owners of SRA apartments broke the rules of the lock-in period and resold their units between 2011 and 2017. The Maharashtra government therefore planned for a shorter lock-in period.

The original owner may now sell their property five years after the demolition date, citing recent changes to the SRA criteria. But authorization from SRA would be needed.

Is The SRA Scheme Applicable Only In Mumbai?

The redevelopment plan was first limited to Mumbai. On March 17, 2016, however, the Thane Municipal Corporation (TMC)-governed property saw the approval of the slum restoration project by the authorities. The Maharashtra Slum Areas (Improvement, Clearance, and Redevelopment) Act, 1971's Section 3B (3) allowed for the same. Thus, Thane is also covered under the SRA scheme.

What Are The Amenities Included In A SRA Flat?

Builders are required to sign a tripartite agreement with the slum inhabitants and the relevant cooperative housing association prior to initiating the rebuilding process. This agreement's structure is available on the slum rehabilitation authority's official website.

The minimal amenities that a developer is required to give in the refurbished property are enumerated in the agreement's appendix. Among the more significant ones are:

There will be individual water and electrical connections for every tenement.

Every fitting must be of high quality and certified by the Indian Standards Institute (ISI).

Every apartment will have floors made of vitrified tiles or comparable materials.

The unit will feature glazed tiles up to a height of 900 mm and a granite/marble kitchen platform with a stainless-steel sink.

Conclusion

Purchasing an SRA apartment may seem like a wise investment, but in order to obtain a house loan (should one be required), the investor must ensure that the property is registered through a sale deed and complies with all SRA rules and regulations. To prevent any problems in the future, you can also get in touch with a real estate agent.

#Floor Space Index

# What Is SRA?

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