What is a redevelopment and why is it required?
Housing redevelopment is a process in which residential premises are reconstructed by demolishing the existing structure and constructing a new one in its place, according to the respective authority’s approvals.
The process works best when the housing society has reached the end of its construction lifespan, in a way that it can no longer sustain repairs, and where there is scope to increase the floor area ratio (FAR) or floor space index (FSI) such that the developer earns its profit through selling the extra FSI. Such redevelopment projects can also help check housing prices by building in prime areas with a minimum initial investment.
As for the homeowners in that society, they receive new flats, in an area equal to or more than their existing flats, in the reconstructed building as per the agreement between the developer and the society in question. The only caveat is that at least 75 percent of the members of the society have to give their consent, and only in the case of a Cooperative Housing Society.
Benefits of Redevelopment
- Larger apartments
- Better amenities
- Higher resale value of property
- More parking spaces
- Better fire safety system
Stages of redevelopment
Before opting for redevelopment, the society must complete a Structural Audit of the existing building. Society should reconsider redevelopment only if the society has a conveyance deed in its favor. In case the conveyance deed is not in favor of society, the process for deemed conveyance should be done by appointing an appropriate agency. Once that is accomplished, we have to consider the following mentioned steps:
Managing committee to call for Special General Meeting(SGM) within a period of 1 month on receipt of application.
The rules and the bylaws of the society or apartments are made under the relevant law with respect to convening meetings of the General Body or the Managing Committee,
- Circulation of agenda items.
- A quorum at the meetings. The quorum for the SGM shall be 3/4th of the total number of members of the Society. If the quorum is not attained, the SGM shall be adjourned for 8 days.
- Taking policy decisions.
- Supplying minutes of the meeting to the members, etc. shall apply to the matters relating to the re-development project.
- The Managing Committee shall place before the General Body the agenda item for taking policy decisions relating to the Re-development of a building; and
- For the appointment of the Architect / Project Management Consultant to prepare the re-development project.
- Consent of not less than seventy-five percent of the total members of the body for the re-development of the building and
- Authorize the Managing Committee to take all further necessary action/steps for the re-development project.
- All members of the building shall be informed with reference to the policy decision regarding the re-development of the building taken in the meeting.
The Architect / Project Management Consultant appointed by the Managing Committee as per the special general meeting decision, shall prepare the project report within two months and submit the same to the Managing Committee.
The report will contain details like:
- Carpet area to be provided to the members
- Providing alternative accommodation and payment of rent
- Vacant area
- Garden area
- Parking space
- Building specifications
- Common areas
- Recreation facilities and amenities
- Provisions of corpus fund and bank guarantee
- Time-limit for completion of the re-development project, obtaining the approvals/permissions from all statutory bodies required under the applicable laws
- Any other matters may be necessary for the re-development project.
Invite offers from eligible contractors, builders, companies, or developers.
Preparing a list of offers received
Immediately after receiving the offers from the contractors, builders, company, or developer within the stipulated time limit, the Secretary of the Managing Committee shall prepare a list of offers received and display the same on the notice board of the office of the building for knowledge and information of the members.
Selection of Developer, The Managing Committee shall after considering the offers received and presentation made by each contractor, builder, or developer, as the case may be, select one as the developer for the re-development project.
Agreement with the Developer
On receipt of the plan for the new buildings, the Managing Committee and the Redevelopment Committee members should first approve the same and satisfy themselves that the same is as per their offer. Then, the Society should call for an SGM for approving the plan of the flats/building and amenities offered by the Builder. When the same is approved in the General Body, the Society should pass a resolution to sign a Redevelopment Agreement with the Developer and also fix the date for vacating the old flats and receiving the compensations.
Handing over the property for re-development
The Developer should then proceed to get the plans approved and obtain I.O.D.(Intimation of Disapproval ) from Municipal Corporation. After fulfilling the terms mentioned in the I.O.D., the Developer should obtain a Commencement Certificate up to the plinth.
Conveyance / Occupation Certificates
After construction of the Building is completed, the Society should follow up and ensure that the Developer gives Conveyance, Occupation Certificate, and regular Water Connection within 4 months from the date of handing over of the new flats to the members of the Society.
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