Redevelopment entails tearing down the old building and replacing it with a new one that has new dimensions and space. Basically redevelopment of a building means to change the old structure and replace it with new dimensions.When a building structure requires a proper renovation, the process of redevelopment is carried out.According to Bye-law No. 77, when a building is more than 30 years old, a structural audit must be performed. The results of such a structural audit would show the building’s state and determine whether the society needs to be developed.The process of redevelopment of a building can be explained and studied clearly by discussing section 79(A) of Maharashtra Co-operative Societies Act,1961 which is amended recently on 4th July,2019 and new redevelopment rules are added.There are various steps to be taken before calling it a proper redevelopment which is to be discussed in this article.In accordance with section 79A of the Maharashtra Co-operative Societies Act, the Maharashtra government published a circular on January 3rd,2009, with the goal of bringing clarity and openness to the process of redeveloping society and for the efficient operation of society.In the redevelopment of society building, openness was absent, there was uncertainty, and litigation because there were no established norms.The guidelines below are obligatory and built on co-operative societies.The government has also instructed BMC to investigate whether the society appointed the developer in accordance with the aforementioned instructions and whether the Deputy Registrar has granted the requisite authorisation for the employment.
TYPES OF REDEVELOPMENT
1.Self-redevelopment-Every member may receive 20% to 30% more room as a result of self-redevelopment, and the society or its individual members could anticipate some corpus (from the sale of some flats) to help offset increases in maintenance costs and property taxes. Who among the members assumes responsibility for the project’s successful completion is a fundamental problem, though.
2.Redevelopment through builders-Due of inherent problems with self-redevelopment, the redevelopment through builders paradigm is one that is frequently used. The typical preference of society is for reputable developers, however they are not interested in small-scale projects. However, there have been numerous instances of lengthy delays that put residents through hardship.
Redevelopment of slums: Slums are home to 62% of Mumbai’s population, with Dharavi being the biggest. There are slum buildings around.
3.Slums redevelopment- Dharavi, Mumbai’s largest slum, is home to 62% of the city’s residents. Every slum building that existed before January 1, 1995 is considered a protected structure, and every slum resident whose name is listed on the electoral lists as of that date and who is still residing in the slum is entitled for rehabilitation in a 300 square foot flat.
4.Redevelopment of Tented (Pagdi) Buildings-Tenants residing in non-cessed buildings prior to June 13, 1996 are eligible for new apartments in redeveloped buildings with a minimum area of 300 square feet and a maximum area of 1,292 square feet. Free of charge. If two to five tenanted buildings are jointly renovated, the developer will receive an additional 60 to 70% FSI as an incentive.
5.Cluster Development-Houses are built closer together on a specific plot of land rather than being scattered uniformly throughout wide regions as is the case with sprawl development, which is the economic growth of an entire residential area with the goal of protecting open spaces and environmental resources. Buildings that are unsafe or dangerous would be “rehabilitated” as soon as feasible, and courts would be urged to resolve any pending lawsuits quickly.
STEPS FOR INITIATING REDEVELOPMENT OF A BUILDING
The society must conduct a structural audit of the existing structure before deciding to pursue redevelopment. An audit of a building’s structural integrity i.e a “STRUCTURAL AUDIT”i s similar to how a doctor checks a patient in terms of general health and performance. It makes sure the structure and its surroundings are risk-free and secure. In order for the buildings to function better during the course of their service lives, it analyses the situation and recommends the necessary repairs and retrofitting. An expert and certified structural consultant conducts the structural audit. Structural audit’s goal is to protect lives and structures and to comprehend the state of the building It also helps to discover crucial places that need rapid repair and to adhere to statutory criteria. One must take into account the following actions once the above mentioned process of structural audit is completed.
1. Organise a special general assembly meeting (SGM)
A special meeting of the members should be called by the managing committee to go through the redevelopment plan. The bye-laws stipulate that for the rebuilding project to be officially launched, 75% of the total number of members must support it. (A change to Maharashtra’s redevelopment law stipulates that older and smaller buildings only require 51% of members’ agreement.) Additionally, it is advised that a unique redevelopment committee be formed to oversee the entire procedure. For the Redevelopment to take place, each and every member of the Society must give their written assent. In contrast to the S R A Project, a Registered Co-operative Housing Society must receive the unanimous approval of all of its members before redevelopment can begin. The authorization for redevelopment will not be granted by the relevant authorities, such as the Dy. Registrar of Co-operative Societies and the BMC, if all of the Society’s members do not consent to it.The members’ consent is unconditional and stamped with a Rs.100 bill. Therefore, once consent has been granted by a member, it cannot be withdrawn. A member must follow the legal process to prove his point of dissatisfaction in order to retract his consent only if he has a compelling basis to do so.
2. Request price quotes from architects and project management experts (PMC)
Before choosing one of them in a subsequent SGM, the Committee should solicit bids from at least five architects and PMCs and present their prices to the members. They should have a solid track record in real estate development and be accredited with the government or another recognised entity. Throughout the process, the members are permitted to offer insightful thoughts and suggestions.
3. Submit a building redevelopment project proposal
The committee must submit a proposal for the project after agreeing on terms and conditions and the project’s scope of work with the architect or PMC.
4.Obtain the project report
The architect/PMC shall deliver a Project Feasibility Report to the committee within two months of their appointment. The Floor Space Index (FSI) and Transfer of Development Rights (TDR) are two factors that are taken into account in this study while analysing the total residential area, communal areas, gardens, etc. Before any approvals are given, ideas are requested and the Report is made available to all society members.
5. Request developer tenders
In order to receive competitive bids from developers, the Architect/PMC creates a Tender document. There is a decided primary requirement that cannot be altered. This could be a corpus fund or a carpet area (an amount paid by the developer due to redevelopment). All of the bids are reviewed in a following SGM that is attended by developers’ representatives.
6. Pick a developer
The Architect/PMC compares the tenders while taking into account elements like financial costs, market repute, technical soundness, and successful projects of each developer, and then narrows the field to at least five. A developer is chosen by a 3/4th majority of the members, and the project can begin once an agreement has been reached with that developer.
Apart from these there are various documents which are required for a proper legal redevelopment.Legal documents which are needed are named below
a)society registration certificate b)conveyance deed (necessary for self-development projects), c)sale deed, d)title certificate, e)a certified property card (showing ownership in the name of society), f)the original building plan, g)structural audit report, h)redevelopment agreement, i)copy of new approved plan, j)flat-wise carpet area list, k)Development Plan (DP) remark (details of the land and its surrounding area), l)electricity bill, m)water bill, and all other legal documents pertaining to the land and the buildings.
STAGES OF REDEVELOPMENT
Under this topic we will discuss the further steps which are to be followed after initiating the process of redevelopment for a building.
STEP 1.As discussed above a developer is picked after comparing the tenders, at the last stage at least three developers are selected on their merit and a final selection is done by the SGPM.The final selected developer is given information about his selection through an offer letter and his terms are invited through writing.
STEP 2.To begin with a proper redevelopment process the committee members and the developers need to come on the same page regarding the matters related to the terms and conditions.There can be various conditions which can include, replacement of accommodation, date and time of management, other amenities related to the new building.After proper consultation, the members need to approve the final decisions before applying for sanction from corporation.
STEP 3.The third step is about the execution of agreement which is made regarding the redevelopment of the building between the two parties and a final draft is later approved by the solicitors of both parties before further execution.
STEP 4. In this point we need to get familiar with few special abbreviation like, a)FSI which stands for Floor Space Index, in general terms it means the largest permitted floor area that a builder may construct on a specific plot of land, b)TDR which stands for Transferable development rights which is significant raw material in the real estate business because they enable the developers to build in excess of the permitted floor space indexes (FSI) in accordance with local regulations.
Coming to the topic, after the above three steps are completed,plans for the whole layout as well as the concession plans in favour of TWO FSI are presented for approval by the corporation.After getting receipt of plans from the corporation, approving the loading of TDR, the developer is next supposed to purchase the TDR from open market in the name of the society undergoing the redevelopment.
STEP 4. Next we will read about another term in this step which is known as IOD and it stands for Intimation of Disapproval or Authorisation is the first permit considered for construction.After the above step the developer will obtain IOD from the corporation and finally begins to fulfil all the conditions as per the IOD before he obtains the CC(Completion Certificate-It is a crucial legal document that builders must receive from the neighbourhood civic or municipal authority after a construction or piece of property is finished.)
STEP 5. Before demolishing the building, which is necessary before collecting the CC from the corporation, the members will now move into their alternative accommodations. After the members have moved into their new homes, the building will be demolished, perhaps all of the wings at once or in phases, depending on the redevelopment plans.
STEP 6.Now with issue of CC the developer will begin his construction according to the plan.The construction of the building will began as per the plannings approved with proper safety measures and other terms and conditions.
STEP 7.Obtaining the occupancy certificate is the last step, which enables the developer to assign the occupation to the old as well as the new member, is the last stage before the construction work is declared complete. The developer may legally permit the owners of the apartments to take possession of their units after they receive the occupancy certificate.
Hence,these above steps are explained in brief for proper understanding of steps related to redevelopment of a building.
1.Developers sought interim reliefs against specific members in the case of Maya Developers v. Neelam R. Thakkar & Ors because they were refusing to transfer peaceful and vacant possession despite the development agreement’s being in place. The Defendants claimed that the Section 79-A Directives had not been adhered to. Allegations of particular non-compliances include the absence of a thorough feasibility report, a lack of openness, and the manipulation of the developer selection process to Maya Developers’ advantage—one of whose partners was a relative of a managing committee member. Furthermore, it was argued that the nature of the regulations issued under Section 79-A and the fact that these regulations had legal effect were still up for debate. The Bombay High Court ruled that the 2009 directive seeks to set in place are a set of guidelines.
2.In M/s National Properties v. Sindhi Immigrants CHS & Ors, the developer requested an order requiring some members to transfer vacant and quiet possession in accordance with the development agreement signed with the society and majority members. The plaintiff said that the defendants were all connected to the same Kukreja Group, a company that had applied for the procurement but was not chosen. This entity then bought a few apartments through its friends and family and tried to delay the rebuilding project. The Defendants claimed there was cooperation between the Plaintiff and the society, alleging that the proprietor of the Plaintiff served as the society’s secretary. The Defendants further claimed that the Section 79-A Directives had not been followed.The contending defendants were not even flat holders at the time the consents were initially obtained, the Hon. Bombay High Court ruled.
3.A single member had challenged the redevelopment process in the case of Abhanga Samata CHS v. Parag Arun Binani & Anr on the grounds that the Directives under Section 79-A had not been followed in letter and spirit and that the choice of the developer had been tainted by fraud. Some of the claimed non-compliances included failing to solicit bids through newspaper advertisements, the society failing to get written consent letters from members, the absence of video conferencing during meetings, etc. The redevelopment process was enjoined by the trial court after finding in the member’s favour. The trial court’s ruling was appealed by the society and developer. Their key argument was that the majority had made all of the decisions, and those judgments would be binding on the dissenting minority.
To conclude with we can say that there are huge advantages of redevelopment like,there will be more thoughtfully constructed, earthquake-resistant apartments with bedrooms that have attached bathrooms. The corpus funds that each individual member receives will cover the rise in the cost of maintaining the premises or may be used for other things. Additional compensation from the developer in the range of 25–30% will be given. Additionally, if available, additional space might be purchased from the developer for the best price. There will be access to contemporary amenities and technology including elevators, intercom systems, smoke detectors, fire alarm systems, concealed plumbing, concealed wiring for power, telephone, cable TV, etc. There will be parking on stilts or in the earth, which will free up space on the surface. There will be a clubhouse, a pool, a gym, a community hall, etc.However along with advantages there are numerous disadvantages as well like,the members who are entitled to several benefits in exchange for approving the project would suffer greatly from any errors in the Redevelopment Deed’s preparation. Members must relinquish control of their apartments for an extended length of time, which disturbs their daily routine.Residential complexes that have been turned into commercial complexes are rarely chosen for housing or homes. More new members would take longer to get along with the original members, leading to disagreements on a variety of topics. The need for more people will increase water use, which will lead to a deficit of water supplies. More parking space will be needed for additional automobiles. New construction will be more expensive because it will have more modern features.The tax load is considerable, and significant municipal and water fees apply if an occupation certificate (OC) is not obtained. Property taxes have increased. Stamp Duty and Registration Fees at the Current Market Price will apply to any additional area received. Half-completed projects are always feared to result in legal action.There are many issues which force the redevelopment of a building specially that of a housing society like lack of elevators in high rises buildings, water supply problem, leakage of water, improper interior planning etc.This article is specially based on MCS act because Maharashtra faced a lot of issues regarding buildings and its development.However Maharashtra is having high potential for builders and developers.The amendment introduces in the act can deal with a lot of problems in near future which might arise during development,redevelopment and restoration of a building.
1.MAHARASHTRA CO-OPERATIVE SOCIETIES ACT,1960
2.REDEVELOPMENT IN CO-OP HSG SOCIETIES BY C.A RAMESH PRABHU
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