MUMBAI: BMC will create an online trading platform for Development Rights Certificates (DRC), akin to a stock exchange. All DRCs will be dematerialised and maintained in an electronic format. Once the electronic marketplace is established, citizens will be able to buy Transferable Development Rights (TDR) as an investment too.
The creation of the marketplace is also expected to help bring transparency to the sale of TDR. Additionally, individual societies or flat owners will now be able to purchase small amounts of DRC for regularisation or extension purposes without relying on brokers.
Special Planning Authorities or civic bodies such as BMC grant DRC as compensation when they acquire land from owners as part of reservation or for infrastructure projects. The holder of the DRC has the option to sell or otherwise transfer TDR, either fully or partially, to another party. TDR allows developers to build above the permissible Floor Space Index (FSI), subject to restrictions of a particular location or area.
According to an order issued by the state govt’s Urban Development dept, the holder of the DRC has the option to sell or otherwise transfer TDR, either fully or partially, to another party on the electronic platform, and registered buyers can express interest in purchasing the same.
Most transfers of TDR occur in an unorganised fashion, with the holder of the TDR finding another person who needs the TDR, and the sale or purchase transaction is carried out between them. However, those who are not part of the real estate industry and are in possession of TDR have trouble finding buyers for TDR on their own.
Similarly, those who need TDR for utilisation experience difficulty in finding sellers and determining the rational price range on their own. This has led to the role of brokers, who hoard TDR or monopolise the market, leading to the role of black money in TDR transactions.
According to the order, the absence of an organised marketplace, uncertain pricing, and even double transactions have led to potential legal disputes. Besides, challenges have reduced the transfer of reserved plots in the Development Plan, delaying implementation of the Development Plan.
The creation of the electronic marketplace is expected to eliminate current problems and help discover fair market prices for TDR. The DRC holders and interested parties in the TDR market need to register, and any two registered parties can engage in a deal without knowing each other directly.
CREDAI-MCHI President Domnic Romell said, “The marketplace will bring in transparency. There will be a lot of choice, and the prices too will be fair. There are lesser chances of hoarding, and the govt will also be able to know the total amount of TDR in the market.”
