Maharashtra is the third largest state in the country and the second most populated one. According to the 2011 census, 11.2 crore Indians call the state, their home. Mumbai alone houses 1.84 crore people, all jostling for space, looking for a place to call home, in the country's financial capital. As of 2016, Mumbai accounts for a little (over) than 6.16% of the country's economy, by contributing nearly 10% to factory employment, about 30% to annual income tax collections and 60% to custom duty collections amongst other things. The city brings in nearly 40% of the foreign trade in the country and pours in almost ₹40,000 crores in corporate taxes.

Owing to the continuous incoming flow of migrants and economic progress, the city has seen aggressive growth in both commercial and residential property development. Today, Mumbai has a skyline that is in league with other cosmopolitans like New York and Shanghai. But the city's real estate trajectory has been nothing short of cinematic. From archaic tenancy dictums to the boom in privatized residences, the city's real estate landscape has seen tectonic shifts. As laws like MahaRERA take the front seat, let us have a look at the other laws that are nothing short of milestones, and have shaped the real estate sector, bringing it to where it stands today - a friendlier place for homebuyers and investors, looking to buy a residential property in the city of Mumbai.

BOMBAY TOWN PLANNING ACT

To facilitate both, the growing industrial sector and the rapid urbanization, the Bombay Town Planning Act was passed in the Bombay Presidency, on the 6th of March 1915. Other provinces in British India soon followed suit. The Act had two main objectives-

1. Introducing the idea of the Town Planning Schemes for areas that fall under their jurisdiction.

2. The recovery of the planning authority of betterment contribution from the owners of the benefited lands. Which in simpler words mean, that if you owned a house that has seen a certain price appreciation, you were liable to pay a fee to the civic authorities.

The Bombay Town Planning Act, 1915, was soon amended, making way for the Bombay Town Planning, 1954 when the authorities realized the initial scheme had given rise to piecemeal planning, that had no relation to the adjoining region. This meant that each different locality or land parcel was being developed in abrupt, fractured ways that didn't fall into line with the larger picture of the city's development. The second edition of the Bombay Town Planning Act was brought into place in 1954 and was finally implemented by 1957 to ensure that each square inch of land within the municipal limits was developed in an integrated fashion, The idea of a Development Plan too was first introduced under this Act.

This Act is monumental in the history of urbanization in modern India and by relation, modern real estate because this is the oldest recorded method of bringing about organized development in an urban landscape in the country. Large agricultural plots inside the city were reconstituted into smaller service urban plots, allowing the land to be used for commercial and residential purposes. The basic idea behind this move was to a) open the city up to infrastructural growth and development and b) allow the total value of the land to appreciate, after the old land had been reconstituted to profitable land parcels, even making way for roadways to be constructed. Elements like 'green belt' were also included in these town planning schemes.

MAHARASHTRA REGIONAL TOWN PLANNING ACT

The Bombay Town Planning Act, covered only the Bombay State as the name rightly suggests. The Bombay State then comprised of the Bombay Presidency, Saurashtra & Kutch, present-day Gujarat, and parts of Vidarbha and Marathwada. Saurashtra soon got a town planning Act of its own, given the difference in the nature and quality of land, between the two regions. The Saurashtra Town Planning Act was imposed in 1955.

The Maharashtra Regional Town Planning Act was brought forward in 1966, introducing the planning legislation operating through the entire state. In spirit, it was the statewide implementation of what went under The Bombay Town Planning Act of 1954. This Act has been instrumental in allowing commercialized residential properties to come up and be sold as a full-fledged business, amongst other things. Let us take a look at the salient features of this Act, and what this meant for the cities in the state, and the people living in them.

1. The Maharashtra Regional Town Planning Act intended to develop land that was demarcated and kept aside for with the express purpose of development and urbanization.

2. Better implementation of the Town Planning Schemes and better blue-printing of the Development Plans.

3. To allow for the creation of 'New Towns'. (This has also been one of the contributors to the inception of Navi Mumbai, which acted as a huge relief for Mumbai and it's population growth).

4. To allow compulsory land acquisitions possible for public use.

At its birth, the Act was predominantly concerned over the implementation of the Development Plans that were made by the concerned authorities. This Act also detailed which authority was in charge of making these plans. After years of chaos and disorganization, a semblance of system and order was introduced into the field of the city town and planning. This Act has also been single-handedly responsible for the orderly development of land that was acquired after the Land Acquisition Act was implemented, all the way back in 1894. The first commercialized real estate properties that cropped up on the face of Mumbai, owes its origin to the Maharashtra Regional Town Planning Act.

It is essential to mention the Land Pooling Scheme, that was introduced under this Act. This was the first time Mumbai witnessed an organized residential society take shape. A seminal milestone in the history of real estate in Mumbai, this scheme allowed middle-class residents of Mumbai to inch closer to their dream of owning homes (apartments) in the city. Under the Act, provisions were made for the scheme, by cordoning off specific areas, where land parcels could be sold to individuals who wished to come together to build a 'society' together. Plots were reconstituted by the civic authorities to make it more viable for the construction of residential buildings.

MAHARASHTRA OWNERSHIP OF FLAT ACT

In the years that followed, the real estate market in Mumbai took off and how. However, what also came in along with it, was years of malpractice, fraud and delayed possession. Builders felt next to no obligation to keep to their commitments - be it of timely possession, or of what they promised to the homebuyer at the time of the transaction. They barely held any liabilities towards homeowners and to take them to court was an arduous task. In 1963, the newly formed Maharashtra State Government passed the Maharashtra Ownership of Flat Act, that was meant to regulate the real estate sector in the state. The Act had been enacted to regulate the promotion, construction, sale, management and transfer of flats sold on an ownership basis within the State of Maharashtra, securing the interests of all the parties involved.

The Act started by defining some very pertinent concepts in real estate. What could be defined as a flat, who qualifies as an owner, and who qualifies as a promoter and what were the duties, liabilities and entitlements of everyone involved. Here are some of the important points the Act puts forward.

1. What is a flat?

A separate and self-contained premise, which is used or is intended to be used as a residence, office, show-room, shop, godown, functioning as part of any industry or business including a garage, forms part of a building.

2. Who is a Promoter?

It is defined to mean a person who constructs or causes to be constructed a block or building of flats or apartments for selling all or any of them to a Company, Co-operative Society and Associations of Persons. The term promoter includes his assigns and thus, if a person assigns his interests in the land to another person then the assignee would become a promoter. If the builder and the person selling the flats are different, then both of them will be considered as promoters.

The Act also contains some of the most important rulings that are now integral in every flat purchase. These include the promoter making a full disclosure of their title to the land along with a title certificate including all encumbrances on the land, all outgoings for the property rates, municipal taxes etc to avoid fraudulent land purchases. The promoter is also required to submit a date of possession in writing, so homebuyers were spared the ordeal of delayed possession. Occupation Certificates could be handed out, only after the municipal authority approved it.

However, one of the most important provisions of the Act is the Registration of Agreements. Under this provision, before accepting any payment as an advance payment or deposit from a home buyer, the Promoter has a liability to provide a notarized written agreement in the prescribed format. Alongside that, the deposit amount or advance could not exceed 20% of the sale price.

After the historic Ramniklal Kotak v. Varsha Builders case, the Bombay High Court stated that the Legislature has brought in these restrictions to prevent bogus sales conducted by Promoter and to put a check on business malpractices in regards to sales and transfer of flats.

Thanks to this Act, builders were finally made to face the music, when anybody committed an offence, something that went unnoticed before the Act was brought in. This made the process of buying a home, a lot more secure, both financially and mentally. Years of malpractice in the commercial real estate sector was finally put to task, by allowing homebuyers to have a medium to address their grievances. This was a monumental moment in the history of real estate in Mumbai.

REAL ESTATE (REGULATION AND DEVELOPMENT) ACT

The Maharashtra Ownership of Flat Act provides the structural framework of the Real Estate (Regulation and Development) Act, that was finally passed in 2016. However, the latter has a more comprehensive and in-depth coverage of the interests of all parties involved in the transaction. The Act was slated to regulate the real estate sector that involves over 76,000 developers and is expected to trigger an unperturbed era of transparency and efficiency for both the buyers and developers.

A lot has been said about the functionality and efficiency of the Act, but what the intention of this article is to draw attention to the legacy of legal acts that were put in place, before the inception of RERA so homebuyers can trace the upward graph of real estate regulation in the city. Every city has a story of growth that is pent up on the pillars of civic responsibility, political patronage, legal framework and corporate bodies. Today, Mumbai is home to the most expensive real estate market in the country and ranks among the top twenty most expensive cities to live in, across the Asian continent. The city's real estate trajectory started from a chaotic jumble of corruption, lawlessness and disorganization. Present-day India can not imagine a more smoothly functioning and profitable real estate market, than the one in Mumbai. To live in Mumbai is to live one step closer to the ultimate urban dream.