Transit Accommodation & the Construction Stage in Mumbai Redevelopment

Transit accommodation is the temporary housing your developer must provide, or fully fund, while your old building is demolished and the new one is constructed. Under the Government of Maharashtra's Section 79A redevelopment directive dated 4 July 2019, you should hand over your flat only after your individual Permanent Alternate Accommodation Agreement (PAAA) is signed and registered, and the developer must pay you monthly rent — or supply a transit camp — for the entire construction period. This guide explains, in plain language, what you are entitled to during transit, how to read the rent and escalation clauses, what to watch on site, and how the five-year defect-liability shield works after you move back in.

What "transit accommodation" actually means

Redevelopment means your building comes down and a new one goes up in its place. That process usually takes two to four years, and during that time every member needs somewhere else to live. The developer bears this cost — it is part of the deal you approved. There are two documents that govern it:

• The Development Agreement (DA) — the society-level contract between your co-operative housing society and the developer. It sets the overall terms of the project.
• The Permanent Alternate Accommodation Agreement (PAAA) — a separate agreement signed by each individual member with the developer. It records your new flat's carpet area (the actual usable floor area inside your walls), the monthly rent and deposit during transit, the completion timeline, the corpus (a one-time lump sum paid to compensate for inconvenience and higher future outgoings), and the hand-over terms.

The 79A directive of 4 July 2019 makes it mandatory that both the development agreement and every member's PAAA are registered. This is the single most important protection you have during transit — do not treat it as a formality.

The three ways a developer can house you

Your alternate-accommodation clause will usually take one of three forms. Understand which one you are agreeing to, because they carry very different risks.

Monthly rent with a clear yearly escalation is generally the safest for members, because it tracks the market and keeps the developer paying for as long as the project is unfinished. You can benchmark whether a proposed figure is realistic using the site's rent comparison tool.

Why you must register the PAAA before you vacate

Section 17 of the Registration Act, 1908 makes registration compulsory for any document that creates a right in immovable property. Your PAAA promises you a new flat of a defined area in the redeveloped building — that is a right in immovable property. An unregistered PAAA is weak evidence and can be very hard to enforce if a dispute arises. Registering it puts your entitlement on the public record and gives it the full backing of law.

The 79A directive of 4 July 2019 also strengthens your position in two further ways that matter during transit:

• A developer bank guarantee equal to 20% of the project value. This is security your society can invoke if the developer defaults — including on rent obligations.
• A defined completion deadline — the project must be completed within two years of the plinth Commencement Certificate (the plinth CC is the municipal permission issued once the foundation level is built), extendable to three years only in exceptional cases.

Make sure your rent amount, escalation rate, deposit, brokerage, shifting charges (both ways), and the completion timeline are all written into the registered PAAA — not left to a side letter or a WhatsApp message. Registration also attracts stamp duty under the Maharashtra Stamp Act, 1958; confirm who bears it (usually the developer) in the agreement itself.

How to compute a fair transit rent — the arithmetic

Start with what the law does not do. No regulation fixes your transit rent, your deposit or your escalation rate. DCPR 2034 does not mention them. The Section 79A directive of 4 July 2019 fixes the timeline — two years from the plinth Commencement Certificate, three in exceptional cases — and the 20% bank guarantee, but not the rupee figure. So a developer who tells your society that a rate is "standard" or "as per rules" is quoting a negotiating position, not a law. Ask which regulation, and you will not get an answer.

Because there is no statutory rate, you build one. Transit rent is a two-number calculation:

Both inputs are things your committee can establish in a week:

1. Your carpet area. Take it from your share certificate, your existing agreement or the society's approved plan — not from a list handed to you by the developer. Use carpet area as defined in Section 2(k) of RERA, 2016: the net usable floor area, excluding external walls, service shafts, exclusive balcony and exclusive open terrace, but including the internal partition walls.
2. The local rate. Collect three actual leave-and-licence agreements or live listings for flats of similar carpet area within about a kilometre of your building. Divide each monthly rent by that flat's carpet area in square feet. Take the middle of the three values. That is your rate per square foot per month — and unlike the developer's figure, it is evidence you can put on the table.

Base the rent on the area you are vacating, not on a flat amount per member. A clause offering every member the same rupee figure regardless of flat size quietly moves money from the larger flats to the smaller ones. In a building of mixed sizes, work out what the offer comes to per square foot for your flat before the society votes on it.

The escalation clause — and what one word is worth

Now run that Rs 45,000 forward. Here is a three-year transit period with a 7% yearly escalation:

Escalation is worth Rs 1,16,052 over these three years: 36 months at the flat base of Rs 45,000 is Rs 16,20,000, against Rs 17,36,052 with escalation. Then check one word in the clause. It must escalate on the rent for the immediately preceding twelve months, not on the initial rent. Compounding gives Rs 51,521 a month in year 3; taking 7% of the original Rs 45,000 each year gives only Rs 51,300, and over a five-year transit that difference comes to Rs 27,408. On top of the rent, a fair PAAA should separately provide for:

• A brokerage allowance (often one month's rent each year) to cover the estate agent's fee on your rented flat;
• Shifting charges both ways — out of the old flat and back into the new one;
• A refundable interest-free deposit if the landlord of your rented flat demands one.

Price the overrun, not the promise

The 79A directive gives the project two years from the plinth CC, three in exceptional cases. Builds routinely take longer, and the rent clause decides who pays for that. Same Rs 45,000 base, same 7% yearly escalation:

Two numbers follow, and both are ones you can hold a developer to. First, a two-year overrun is worth Rs 13,69,356 per member on this example — that is exactly the price of a clause reading "rent payable until actual possession" instead of "rent payable for 36 months". Second, a lump sum pitched as "36 months × Rs 45,000 = Rs 16.20 lakh" is already Rs 1,16,052 short of the escalated three-year figure, and Rs 14,85,408 short if the build takes five years. That is the argument against a lump sum, in rupees.

Which clause has to carry which number

Take this list into the PAAA draft and check that every line has a real figure in it — not a blank, not "as mutually agreed", not a cross-reference to another document. A missing number here is the commonest way transit money is lost.

Transit rent, deposit, brokerage and escalation are contractual, not statutory — no provision of DCPR 2034 or RERA, 2016 fixes them, so every rupee figure above is illustrative arithmetic you re-run with your own inputs. The completion window and the 20% bank guarantee come from the Government of Maharashtra Section 79A redevelopment directive dated 4 July 2019. Carpet area is defined by Section 2(k) of RERA, 2016.

Use the rent comparison tool to check that your base figure genuinely rents a comparable home in your area before the society votes on the offer.

When the build runs late — protecting your rent

The most common transit problem is a delayed project where rent payments quietly stop. Your protections are:

• The 79A completion deadline — two years from the plinth CC, three in exceptional cases. If the developer blows past this, the society can escalate and, in a serious default, look to the 20% bank guarantee.
• Section 18 of RERA (the Real Estate (Regulation and Development) Act, 2016) — where possession is delayed beyond the promised date, allottees are entitled either to a refund with interest or to interest for the period of delay. Who counts as the "promoter" decides how such a claim is framed, and Section 2(zk) of RERA defines it — so pull up your project's MahaRERA registration page and check how the society and the developer are each named on it before you file anything.
• Continuing rent liability — a well-drafted PAAA makes rent payable, with escalation, until you actually get possession, not merely until a fixed date. On the example above, that single piece of wording is worth Rs 13,69,356 per member across a two-year overrun. Insist on it.

If a developer stops paying agreed rent or diverts money it collected on trust, that can, in a serious case, amount to criminal breach of trust under Section 316 of the Bharatiya Nyaya Sanhita, 2023 (which replaced the Indian Penal Code), and disputes between the society and the developer can be taken to the Co-operative Court under Section 91 of the Maharashtra Co-operative Societies Act, 1960. For a step-by-step response to a stalled project, see what to do about builder delay.

Monitoring the construction stage

Once you have moved out, the society should not go quiet. The build is where quality and area are either delivered or quietly eroded, so appoint a small works-monitoring sub-committee and, ideally, an independent Project Management Consultant (PMC) — a professional engineer who inspects progress on the society's behalf. Key legal levers during construction:

Plans and specifications cannot be changed at will

Section 14 of RERA bars the promoter from altering the sanctioned plans, layout or specifications of a project without the consent of at least two-thirds of the allottees. In redevelopment this is vital: it stops a developer from silently shrinking your flat, changing the amenities you were promised, or reworking the layout to squeeze in more saleable area. Any change must come back to members for a two-thirds vote.

Buyers' money must sit in a separate account

Section 4(2)(l)(D) of RERA requires 70% of the money collected from flat buyers to be kept in a separate scheduled-bank account and withdrawn only in proportion to construction completion, with an annual audit by a chartered accountant within six months of the year-end. This "escrow" discipline reduces the risk of your project's funds being diverted to another site — a leading cause of stalled redevelopments.

Verify area, not just progress

Cross-check the carpet area being built against your PAAA and the sanctioned plan. Area shortfall is one of the most common redevelopment disputes. The site's additional area calculator and FSI calculator help the committee sanity-check what the plot can deliver and what each member is owed. Also watch the clauses in your agreement itself — see the red flags in a development agreement for the specific traps that surface during the build.

The five-year defect-liability shield

Getting the keys is not the finish line. Section 14(3) of RERA makes the promoter liable to repair, free of charge, any structural defect or defect in workmanship, quality or provision of services that is brought to its notice within five years of possession — and to do so within 30 days of being told. Common examples are seepage and leakage, cracks, faulty plumbing or electricals, and lift or common-area problems.

To use this protection well:

• Record possession properly — the five-year clock starts from possession, so document the date for each member.
• Report defects in writing — email or registered letter with photographs, keeping a dated log. Verbal complaints are hard to prove.
• Escalate if ignored — a persistent failure to fix defects can be pursued before MahaRERA, and deficiency of service can also be raised under the Consumer Protection Act, 2019. See the summaries under defect-liability court orders.

Hold back the corpus and any final payments in a way that keeps leverage until snags are cleared — the mechanics of corpus, possession and hand-over are covered in detail in the possession and corpus guide.

What this means for your society — a quick checklist

1. Confirm the DA and every PAAA are registered under Section 17 of the Registration Act, 1908 before any keys change hands.
2. Compute your own base rent before you look at the developer's: carpet area you are vacating × the median per-sq-ft monthly rent from three comparable local flats. Then check the clause carries every figure in the table above — base, escalation on the preceding year's rent, deposit, brokerage and shifting both ways.
3. Make rent payable until actual possession, and confirm the 20% bank guarantee and the two-to-three-year completion window from the 79A directive are in place.
4. Appoint a works-monitoring committee or PMC; verify area and quality against the sanctioned plan; insist any plan change goes to a two-thirds allottee vote under Section 14 of RERA.
5. Record possession dates and lodge every defect in writing to preserve the five-year Section 14(3) protection.

If your society is still selecting a developer or drafting these clauses, it pays to lock the transit and construction terms down early. You can register your society for a review, or start with an independent feasibility report.