Law, REAL Estate

Concept of Transfer of Development Rights TDR

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By Dr Sanjay Chaturvedi, LLB, PhD.

Transfer of Development Rights (TDR) and FSI

Imagine the buzzing city of Mumbai, clean and green, not congested having playgrounds and recreational grounds, affordable housing and well developed public amenities and utilities, and above all clear of slums.

Sounds amazing, but a distinct possibility with this concept of TDR (Transferable Development Rights). Well implemented, this concept has the potential to completely transform the urbanization process and quicker it let us see how it works.

The Legislation

TDRs are governed by Regulation 34 read with Appendix VII of the Development Control Regulations for Greater Bombay, 1991, (known as the DC Regulations), framed under the Maharashtra Regional and Town Planning Act 1966, as amended for time to time.

The Background

Prior to the above amendment, any portion of land which war reserved for a public purpose in the Development Plans was deemed to be a Municipal Reservation, and had to be compulsorily handed over to the Bombay Municipal Corporation (BMC) for a consideration


which was a minuscule percentage of the prevailing market price.

Any opposition from the owner involved a long and cumbersome legal procedure.

This obviously led to untold delays and the concerned land then becoming encumbered by slums.

The concept of TDR

With the amendment, when the owner or lessees of such a reserved land, hands it over to the Planning Authority, namely, the BMC, what he gets in return instead of monetary compensation is an equivalent amount of FSI so handed over. This awarded FSI is called TDR, which he may utilized himself or transfer to any other person. He is thus provided with development rights in the form of TDR, which is nothing but additional FSI, to construct additional floor space over and above the prevailing FSI limits. In other words this enables him or his nominee(s) to build additional housing property in a given area, by carrying put additional construction either on vacant plot of land over and above the existing FSI, or on an existing building, in accordance with the DC Regulations. The owner thus stands compensated. As you can see, it is ‘win-win’ situated for all concerned. The BMC gets reserved lands, free of cost, free of encumbrances, the owner stands adequately compensated; the public benefits form the provisions of ready to use utilities and amenities, additional housing stock benefits developers, it means additional revenue for the BMC, and above all to the consumer public additional housing stock would mean lower prices.

The utilization of TDR

It can be seen that the development potential of a plot of land is separate form the plot itself (called the ‘originating plot’) and is transferred to some other plot (called the ‘receiving plot’) as additional


FSI. Technically, in order to utilize TDR, it has been provided that receiving plot has to necessarily be located wholly or partially to the north of the originating plot. This means that the plot on which the TDR is to be utilized has to necessarily be located to the north of the plot from which the said TDR originates, or be located in the same ward as that of the plot from which the said TDR originates. The idea behind this is to ensure more balanced development of the suburbs and to move towards decongesting the island city. Besides, the Planning Authority has identified certain areas as congested areas, and has not permitted any use of TDR on them.

These are called ‘non-receiving zones’.

The Non-Receiving Zones

These are the areas where no TDR is permitted to be utilized. However, as an exception, and as incentive to develop slums, only ‘Slum TDR’ is allowed to be utilized is non-receiving zones, to the full extent of 1.0 FSI.

Appendix VII, inter alia, lays down the following non-receivable zones.

  1. Where permissible FSI is less than 0,
  2. Where permissible FSI is less than 0,
  3. On plots falling within 50 of roads on which no new shops are permitted, more particularly described in Regulation 53(2) of DCR 1991;
  4. Coastal Areas, No development zones, tourism development zones.
  5. Areas for which MMRDA and MHADA is the Special Planning Authority.
  6. Anywhere in the Island
  7. Between the tracks of Western Railway and V.Road..
  8. Between the tracks of Western Railway and Western Express Highway
  1. Between the tracks of Central Railway and LBS


Who can utilize TDR

TDR can be utilized in part or in full by any owner / lessee in whose favor it is granted by the BMC, on his receiving plot, or by any other person/nominees upto whom he has transferred it and who is in possession of land in the receiving zone.

The categories of TDR

There are presently four variants of TDR (one must bear in mind here that presently there are more than 42 categories of reservations under the Development Plan)· ‘Green belt’ reservations like recreation grounds playgrounds, parade grounds, etc. are grouped along with Municipal Schools , Municipal Hospitals, Welfare Centres etc., and

  • additional FSI (i.e. 40% of the net plot area) is permitted against their
  • Reservation for road widening and for new roads are permitted further 0.4 FSI
  • ‘Slum’ TDR, wherein the Slum Redevelopment Authority (SRA) being the Appropriate Authority, sanctions TDR against rehabilitation of slums, is permitted further 2 FSI, in receiving zones and full 1.0 FSI is non receiving zones (as mentioned earlier). This makes the total additional FSI component by utilization of TDR, equal to 1.0 over and above the existing FSI in a receiving zone.
  • In the Island City (i.e. between Colaba and Mahim in the western suburbs and upto Sion in the eastern suburbs) only ‘Heritage’ TDR can be This is a type of TDR issued against development of properties designated as ‘heritage’ and /or ‘heritage precincts’.

The Development Rights Certificate (DRC)

TDR is issued by the BMC in the form of a Development Rights


Certificate (DRC), which is very much like a share certificate, freely transferable by way of lodgment (with the BMC) and transfer (by the authorized / designated officer of BMC, presently the Municipal Commissioner).

The Building Proposal

TDR is utilized by submitted a proposal in the prescribed form to the Building Proposals Department of the BMC, giving all the necessary details of the TDR, details of the plot, the proposed building plans etc., which are then scrutinised by the department and approved on merits.

In Conclusion

It can be seen that TDR has thus enabled the policy makers to ‘effectively’ increase FSI without increasing the ‘FSI’, thus paving the way for an increase in housing stock, consequently bringing down prices.

This step is complemented with an effective state level abolition of Urban Land Ceiling, pragmatic changes to the Bombay Rent Act which, inter alia, should open the doors to rented housing, and lowering of stamp duty rates to practical present-day market prices levels, would go a long way in providing Mumbaikars with good quality affordable housing, amidst adequate green spots, accessible by neat and wide roads, devoid of slums.

In India, 84 cities have already adopted TDR concept.

About Dr. Sanjay Chaturvedi

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