Redevelopment of Project (Tenant & Society )

Redevelopment of Project (Tenant & Society )

INTRODUCTION ON REDEVELOPMENT

If your Society is planning for Redevelopment, then the members of the Society should be familiar with the process for undergoing Redevelopment. The following points will make understanding the redevelopment process better.

What is Redevelopment?

Redevelopment means demolishing the Old Structure and replacing the same with New Structure with new Dimensions and Space.

What is the difference between Restoration and Redevelopment?

In restoration, the existing Building is extensively repaired and restored to its original condition. In Redevelopment, the existing building is demolished and new structure of different dimensions is constructed.

When should be redevelopment be considered?

As per Bye-law no. 77, Structural Audit of the Building is to be conducted when the Building is more than 30 years old. The Report of such Structural Audit would reveal the condition of the Building and indicate whether the Society needs Redevelopment.

Who is the authorised person to conduct Structural Audit?

The Structural Audit is to be conducted only by a Government approved Architect.

Can a Society go in for Redevelopment without conducting a Structural Audit?

Conducting Structural Audit is mandatory since it is the first and the foremost step to be taken for deciding Redevelopment as Structural Survey is required to be carried out for both the building and the adjacent structures.

Can a Society opt for Redevelopment if it is below 30 years of age?

It all depends on the Structural Report and its findings.

Can a Society opt for Redevelopment even if Structural Report does not recommend it?
No, as the Society will be required to get necessary permissions from all the concerned Authorities.

If the member of the Society are not satisfied with the Structural Audit, can the Society get a second Structural Audit Report from another Structural Auditor?
Yes, by all means if the Society is prepared to bear the additional financial burden.

Do members need to prove their contention for demanding a double check on the Survey Report?
It is not necessary as a second opinion is always acceptable.

What happens in a situation where two contradictory Reports are received?

The General Body will decide which Reports needs to be accepted.

Which is preferably – Restoration or Redevelopment?

In case of Restoration of a Building by major repairs, though the beams and pillars of the Building are strengthened externally, the inner core composing of steel rods cannot be restored to its original condition. Hence, even after extensively repairing the Building, there are bound to be umpteen complaints about leakages requiring frequent repairs. In the case of Redevelopment, the entire structure being brand new, it will be free from complaints for at least 10 to 15 years

What are the Advantages of Redevelopment?

• Better planned and designed flats with earthquake structure with attached bathrooms in bedrooms will be available.

• Corpus fund received by each individual member will take care of increase in the maintenance cost of the Premises or could be utilised for other purposes.

• Additional area of 25-30% will be received as compensation from the Developer. Also, additional space, if available, could be purchased from the Developer at best available price.

• Modern facilities / amenities / gadgets like lifts, intercom system, smoke detectors, fire fighting alarm system, concealed plumbing, concealed wiring for electricity, telephone, cable TV etc. will be available.

• Stilt or under ground parking will be available which will ease space on the ground.

• Clubhouse, Swimming Pool, Gymnasium, Community Hall etc. will be available.

  What are the Disadvantages of Redevelopment?

• Any lacuna in preparation of Redevelopment Deed would result in a great loss to the members who are eligible for many perks in consideration of giving permission for the project.

• For considerable period of time, members are required to give up possession of their flats which disrupts their age old routine.

• Residential Complexes if converted to Commercial Complexes are seldom preferred for housing purposes or dwellings.

• Additional new members would take longer time to gel with the original members, resulting in disputes on various issues.

• Additional members will require extra consumption of water creating scarcity or shortage of available water supply.

• Additional vehicles will require additional parking space.

• New construction loaded with all kinds of modern amenities which will in turn increase

  the cost of maintenance to be paid to the Society.

• The Tax burden is high and in case the Occupation Certificate (OC) is not procured,

  Municipal charges and Water charges are high

• There is increase in Property Taxes.

• Additional area received will attract Stamp Duty and Registration Charge at current

  Market Price.

• There is always a fear of half way stalled project resulting in Court case.

STARTING REDEVELOPMENT PROCESS

For starting Redevelopment process, the following process should be carefully followed.

When should a Society consider Redeveloping their Building?

The Society should consider Redevelopment of the building only if an adverse Structural Audit Report is received from an approved Structural Auditor appointed by the Society to do Structural Survey /Audit of the Building as per Bye-Law no. 77 and his report should clearly mention the details of defects / remedies / cost of repairs etc.

What precaution should the Society take at the time of considering Redevelopment of their Buildings?
The Society should consider Re-development only if the Society has Conveyance Deed in their favour. Without Conveyance, the Society should not pass any resolution for re- development but should only move towards major repairs.

What should the Society do in case of a Structural Audit Report?

In case of adverse Structural Audit Report, the Society should circulate the said Report to all the members of the Society within one month of receipt of such report along with their recommendations and call for the consent of all the Members of the Society in writing within 14 days of circulation of Report giving their opinion whether they would like to go for Repairs or Redevelopment.

Whether individual consent of all the members is required for redeveloping the society’s buildings or only a Resolution by the General Body will be sufficient?
A written consent is required from each and every member of the Society for carrying out Redevelopment. Unlike the S R A Project, in a Registered Co-operative Housing Society, 100% consent of all the members is required before the Society can go ahead with Redevelopment.

What is the consequence if Consent is not received from all the members for carrying out Redevelopment?
If all the members of the Society do not give their Consent for Redevelopment, then permission for Redevelopment will not be granted by the concerned authorities like the Dy. Registrar of Co-operative Societies and the BMC.

Can a member change his decision after giving his Consent in writing for Redevelopment?
Consent obtained from the members is irrevocable and embossed with Rs.100/- stamp. Hence, once Consent is given by a member, it cannot be revoked. Only if a member has a strong reason to retract his Consent, then he has to follow the Legal procedure for proving his point of discontent for retracting his Consent.

Can a minority of members stall the process of Redevelopment?

It depends on what proportion of minority is stalling the development and the reasons behind stalling the project. If the reasons for stalling the project are strong, then redevelopment cannot proceed unless the issues with them are settled.
Can one or two members hold the Society to ransom on flimsy grounds?

No member of the Society can hold the Society to ransom on flimsy grounds. The Society will have to initiate action against such members.
What action can the Society initiate against those members who oppose such kind of a move that is supported by a huge Majority/

Then Society can issue show cause notice to the members and take action even to the extent of Expulsion from the Society.
Does a Society require to form a Redevelopment Committee or can a Managing Committee carry out the job independently?

The General Body has the powers to decide on this issue. Appointing a Redevelopment Committee is not mandatory but is highly recommended to ensure transparency in the dealings.
What are the Powers of the Redevelopment Committee?

The General Body has to decide on the powers to be allocated to the Redevelopment Committee. Generally the following powers are to be given to the Redevelopment Committee:

• To approve or reject the proposal placed before them by the Managing Committee of the Society.

• To give suggestions, if any, regarding the Proposal placed before them by the Managing Committee.

What is the tenure of the Redevelopment Committee?

Generally the tenure of the Redevelopment Committee should be from the start of the Project to the completion of the Project to ensure the continuity of the control of the Project.
Whether elections are to be held for selection of members for the redevelopment Committee?

The Election Rules are not binding on the Redevelopment Committee. They should be selected by the General Body from amongst senior members of the Society who are educated to read and understand the various Documents and have active interest in redeveloping the Society.

Can a Redevelopment Committee / member of a Redevelopment Committee be terminated?
If the General Body feels that a member of the Redevelopment Committee or the entire Redevelopment Committee acts to the detriment of the interests of the Society and obstructs the working of the Managing Committee in carrying out Redevelopment, then on the recommendation of the General Body, the tenure of a member a Redevelopment Committee or the entire Redevelopment Committee can be terminated.

REDEVELOPMENT DOCUMENTS

For successful completion of Redevelopment, the Office Bearers of the Society should be aware of the Documents to be kept ready and the Documents to be obtained from the Builder

What is the list of important Documents required for starting Redevelopment?

1. SocietyRegistrationCertificate.
2. 7/12Extract.
3. Formno.6fromRevenueOffice.
4. ConveyanceDeed/LeaseDeed/SaleDeed. 5. SearchReportandTitleCertificate.

6. IndexII
7. N.A.Order.
8. Development Agreement.
9. CitySurveyPlan.
10. Approved Building Plan. 11.Copy of I.O.D. 12.Commencement Certificate. 13.Occupation Certificate. 14.Completion Certificate.
15. Agreement for Sale.
16.Stamp Duty paid proof. 17.Registration Charges paid proof. 18. Appointment Letter.

What are the Documents needed to be prepared for Redevelopment?

1. Feasibilityreport.

2. Suggestionsfrommembers.

3. PublicNoticeforinvitingtheTender.

4. MinutesofvariousMeetings.

5. CorrespondencewithdifferentAuthorities.

6. Obtaining required permission from Deputy Registrar, BMC, ULC Department, Na

   Department etc.

7. T ender Form.

8. Summary of T enders received.

9. Approval of Tenders in the General Body meetings and preparation of Draft and Final

   Minutes.

10.Appointment letters to Advocate, Structural Engineers, Architect, Project Management

Consultant etc.

What are the various Documents and Agreements to be prepared in the process of Redevelopment?

1. Redevelopment Agreement.
2. IndemnityBondbytheDeveloper.
3. FormatofBankGuaranteefromtheBuilder.
4. PowerofAuthorityfromtheSocietytotheDeveloper.
5. Agreementforalternateaccommodation.
6. ConsentLettersfromthememberstotheSociety.
7. ConsentLettersfromthemembersoftheSocietytoBuilder/Developer/BMC.
8. MemorandumofUnderstanding(MOU)betweentheSocietyandBuilder/Developer. 9. AppointmentLetterfromtheSocietytotheBuilder/Developer.
10.Possession Letter from the Builder to the Members.
11.Application by new members to the Society for becoming members in Form no. 3. 12.Undertaking from the new members to the Society.
13.Format of the Resolution to admit new members.
14.List of Documents required to be collected from the Builder.
15.Revocation / Cancellation of Power of Attorney.

What are the requirements from the Developer?

1. Partnership Deed of the Developer duly registered OR Memorandum of Association (as the case may be)

2. CopyofRegistrationCertificate.

3. NameandaddressofthePartners/DirectorsalongwiththeirPAN.

4. Copy of P AN of the Firm.

5. IncomeTaxReturnfiledforthelast3yearsofthePartners/DirectorsoftheCompany.

6. Service T ax Registration no.

7. Copy of Balance Sheet and P/L A/c to understand the financial strength of the Firm /

   Company.

8. FeasibilityReportfromtheDeveloperastohowtheywoulddevelopthePropertyatthe

   offers given by them.