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Redevelopment
Checklist, Issues,
Malpractices, Concerns
Harshad Shah
Chartered Accountant at Independent 142 articles Follow
Practice
March 4, 2023
What is Redevelopment?
Redevelopment refers to the process of reconstruction of

the residential/commercial premises by demolition of the
existing structure and construction of a new structure in its
place. This is done by utilizing the potential of the land by
exploiting additional TDR, higher FSI as specified under the
latest Development Control Regulations (DCR).
Redevelopment of old buildings is changing the face of
Mumbai. In traditional practice redevelopment is done
through a developer, where the part of the benefits of the
additional floor space index (FSI) accruing to the building
are shared between the members of the society &
developer.
Why Redevelopment?
In most metro cities of developing country like

India, residents of old buildings generally tend to look at
redevelopment for following objectives:
a. Building in dilapidated condition
b. After certain age (Building after 30+ years), due to

wear and tear and exposure to natural elements, building
become weak
c. Impact from corrosion particularly in cities like

Mumbai which reduces life of building and old buildings are
unable to withstand adverse conditions like severe weather
(very heavy rains, windy weather from frequent storms,
https://www.linkedin.com/pulse/redevelopment-checklist-issues-malpractices-concerns-harshad-shah/ Page 1 of 38
seismic zones with frequent earth quakes etc.)
d. Uneconomic to repair as cost of major repair is

sometimes more than reconstruction
e. Current building has no Lift causing hardships to

aged residents needing redeveloped tower with Lift
f. Structural repair is not economically feasible to take

care of seepage, weak walls and foundations, leaking water
pipes, etc
g. Occupants (owners or tenants) need more area due to

expansion of family size with change of generation
h. Aspiration of many occupants have gone up with

Indian Economy doing well and they crave for more space
and luxurious building with modern & luxurious amenities
like Sports, Clubs & health related facilities
i. Property prices have sky rocketed making it

unaffordable for many owners to look for larger which may
be beyond their budget
j. With redevelopment, the members get a new building,

more space and monetary benefits without spending any
money from their own pockets
k. Building has unused development rights where they

can build a new and higher structure where the additional
space can be partly given to existing members and partly
sold for a tidy profit (particularly in self-redevelopment)
l. Horizontal expansion is not feasible in a landlocked

island city like Mumbai and thus vertical expansion through
redeveloping existing building in a tall towers become only
option
m. Even in the case of non-landlocked city, horizontal

expansion means need of more roads, transportation,
drainage pipe lines and that comes with heavy cost.
n. State government and municipality is giving

concessions (of higher FSI, TDRs with lower premium,
transparent & speedy approvals) for Redevelopment
Projects
Why few Rebellious Members Obstruct Redevelopment
of Housing Societies
Many judgments delivered by the Bombay High Court have

shut the doors for the minority members who have been
obstructing the redevelopment of their societies on flimsy
grounds. The prime observation of Court is that few
members cannot be permitted to hold the Developer and
the whole of the society to ransom and are bound by the
Development Agreement executed between the society and
the Developer. The Maharashtra Co-operative Societies Act
(MCS Act) says that if a redevelopment proposal has been
passed by following a proper procedure in the society’s
General Body Meeting and at least 75% of the members
present have agreed and hence, the decision
automatically binds the minority members not agreeing to
the redevelopment.
Redevelopment of housing societies in Mumbai witnesses a

number of issues, lack of co-operation from the members
being one of the many. Many housing societies are unable to
undergo redevelopment since senior and aged members
refuse to shift themselves to rental houses and try to avoid
redevelopment. On the other hand, forcible eviction from old
and dangerous building of any housing society cannot be
executed by civic authorities since it is not legally possible.
According to the Mumbai Municipal Corporation Act of
1888, BMC cannot enforce forcible eviction of any member
from private buildings i.e. housing societies.
The only option for such minority members is to take the

legal recourse (which comes with associated costs of legal
fees, which in city like Mumbai can be unaffordable) if they
have substantial reasons over the protest, acceptable to the
Court as also normally they take the stance that they have
their flats and should have a say in the redevelopment.
Reasons of these rebellious members
Ø The process of redevelopment being not taken up in

transparent manner
Ø Senior and aged members refuse to shift themselves to

rental houses
Ø Elements of frauds or favouritism involved
Ø Suspicion & allegations of Ungrateful benefits received by

members managing Committee as also are being offered
larger flats in the new building with free furnishing
Ø Arm-twisting tactics or high handed attitude by the

administrative body etc.
However, it has to be proved that there is some prejudice

caused with an act of deception meted out to them. If the
reasons for objection are valid, the Court may ask the
society to restart the bidding process for redevelopment.
These members should remember that litigation costs in
Bombay High Court are very high in terms of cost of drafting
the petition and fees of Advocates. Objections by a few
members are the main reasons why redevelopment
projects get held up or stalled. But generally when the
majority of the members are in favour of the redevelopment
proposal, the Court allows them to go ahead with the
project.
Types of Redevelopment:
1) Self-Redevelopment
2) Redevelopment through Builders
3) Slums redevelopment (used as an urban renewal

approach to redevelop and transform poor and low income
settlements into new developments or housing of approx.
300 sq. ft.)
4) Redevelopment of Tenanted Buildings
5) Cluster Development
In self-redevelopment, flat owner get extra space and

corpus and builder’s profit could be shared in terms of every
member gaining 20 % to 30% extra space and Society or
their individual members can expect some corpus (from sale
of some flats) to mitigate increase in maintenance cost &
property taxes. However one basic issue is who amongst
members takes responsibility for the smooth completion of
project.
Redevelopment through Builders is widely followed model

due to inherent issues in self-redevelopment. Society would
generally prefer reputed Developers but they would not be
interested in small size project. However there have been

many cases of long delays causing hardships to occupants.
Cluster Development is the economic growth of entire

residential area to safeguard open spaces and
environmental resources and houses are built closer
together on a specific plot of land rather than distributed
uniformly across vast areas. Unsafe and dangerous
buildings would be "rehabilitated" as soon as possible and
courts would be asked to speed up the resolution of on-
going litigation surrounding such buildings.
Important Caveat: For an old building to go for

redevelopment in city like Mumbai:
1. The building should have completed 30 years or are

beyond and
2. To be certified by the Govt. approved architect on

the basis of his “Structural Audit” as fit for
Redevelopment.
3. Building should have Conveyance in its name. Over

the years many societies struggle to get conveyance or
deemed conveyance done. For a speedy resolution, experts
strongly recommend filing a consumer court case against
the builder. Simply file a consumer court case with a prayer
for conveyance and the delay from the builder. Since
conveyance requires property card to be in the legal entity’s
name, your case will also look at such other formalities while
the issue of conveyance is considered. In the end, when the
matter is resolved other important formalities will also be
completed prior to taking on redevelopment.
4. Income tax impact on redevelopment has to be

factored in while deciding the development as there would
be potential Income Tax liability on money received and
project delay beyond 36 months.
Housing societies in ultra-premium south Mumbai,

Bandra localities go in for redevelopment, tap top
builders. Raheja, Rustomjee are among marquee names
for redevelopment.
Redevelopment fever has now gripped some of the top

housing societies in the silk stocking enclaves of south
Mumbai such as Malabar Hill, Walkeshwar, Nepean Sea
Road and Altamount Road. These are upscale
neighbourhoods where new apartments sell for over Rs 1
lakh a square foot. And chasing these societies are many of
the city's A-list developers, rushing to submit their bids to
bag lucrative redevelopment projects. In Bandra's affluent
neighbourhoods of Pali Hill, Carter Road and Mount Mary,
where property prices are among the highest in the suburbs,
many upscale societies are up for redevelopment with
several of them already sewing up agreements with top
builders.
The residents occupy flats ranging from 1,300 sq. ft. to

2,300 sq. ft. and are expecting 30-50% additional space
in the new construction depending on already used FSI &
width of Road & proximity to Metro station.
Societies prefer A Grade developers because of the

experience with many small developers who were unable
to complete the projects. Some housing societies in south
Mumbai are tying up with top builders to redevelop their
buildings. There has been huge traction for quality builders
who have learnt how to navigate redevelopment process.
Earlier, they weren't really involved in society redevelopment
but many have realised they can bring the best value for
society members.
Several societies at ultra-premium locations such as

Altamount Road, Carmichael Road, Walkeshwar and Worli
are going for redevelopment, which suggests the supply of
ultra-luxury units will increase in the future in these micro
markets.
Redevelopment of MHADA Buildings
All redevelopment agreements in the MHADA layout will now

have to be tripartite agreements Housing Societies,
Developers & Maharashtra Housing Area Development
Authority (MHADA). Until now such agreements were signed
with the residents of the society and the developer. MHADA,
as the zamindar, issued the NOC for redevelopment only.
The state’s housing department issued a GR on the change
on 16th March 2021. MHADA has 56 layouts in Mumbai, and

from 2018 there are plans for complete authorization for the
redevelopment of old and dilapidated buildings. The
redevelopment of MHADA buildings is regulated by
Regulation 33 (5) of the Development Control and
Promotion Regulations, 2034.
MHADA mainly constructs residential buildings for

economically weaker (EWG), low-income (LIG), and middle-
income groups (MIG) that are allocated to citizens on a
lottery basis. The land is leased to the Co-operative Housing
Society set by the residents. Since many buildings are old
and dilapidated, many housing societies went for
redevelopment. But in many cases, the redevelopment has
been stuck for years, leaving many families homeless and
financially stressed.
“Since MHADA only issues NOCs, in case of breach of the

terms of the agreement, it can do nothing to help in the
redevelopment. Not only have redevelopment projects been
stuck for years, but even rent payment issues also cannot be
resolved. Therefore, trilateral agreements will now be
mandatory” the GR said.
Builders pay a premium to MHADA for getting more

construction space and concession in rules of having large
open spaces and staircases pushing fast redevelopment of
oil and dilapidated MHADA-led buildings and the agency
asked to issue an offer letter in a time-bound way.
MHADA had cleared many stalled projects and had given

out offer letters, making way for many redevelopment
projects, including Patra Chawl, Chikhalwadi, Motilal Nagar
and BDD chawls. People living in old buildings will get new
homes due to the fast-track redevelopment approvals.
Allowing redevelopment of non-cess buildings under 33(7)

will result in the provision of over 3 Floor Space Index (FSI).
Redevelopment under 33(7) means the board will not be
burdened by maintenance anymore. Also, under 33(7),
these buildings can be developed by the tenants
themselves. Earlier, these reconstructed MHADA-acquired
buildings could be developed only under DCR 33(5) which
has a 1.33 FSI limit. As a result, carrying out redevelopment
was not a viable option.
The Bombay High Court has ruled that rehabilitation

components of redevelopment projects
involving Maharashtra Housing and Area Development
Authority (MHADA) colonies will not attract premium on
areas such as staircase, car parks, fire escape, lobby & lift
rooms. This benchmark ruling would change cost structures
of such projects because up to 30% of a real estate
project’s cost in Mumbai goes towards more than 22
premiums collected by authorities. In response to a petition
filed by developer SD Corp, a joint venture of Shapoorji
Pallonji and the Dilip Thacker Group, the court has directed
Municipal Corporation of Greater Mumbai (MCGM), MHADA
and the state government to refund the premium collected
on above-mentioned common areas because these are free
of floor space index (FSI) area calculations.
This judgment will be treated as an exact interpretation of

existing provisions of Development Control Regulation (or
DCR, which governs redevelopment of MHADA colonies)
and would stop the practice of charging premium on such
areas. If premium is charged on such areas, it will be a bad
practice because such areas occupy almost 30-40% of total
construction and when government gives 2.5 to 3.5 FSI for
rehabilitation schemes, in such cases maximum area is
covered under such portion means staircase, lift, etc.
What are the issues in Redevelopment?
There are Risks and challenges in building redevelopment

project in housing society.
1. Societies are in a dilemma whether they should self-

build or entrust it to a builder.
2. Process of building redevelopment is quite complex in

housing society
3. It takes considerable efforts and time to accomplish

the project
4. If a proper and time bound process is not followed, or if

the risks, uncertainties and challenges are not handled
properly, even a seemingly simple project can fail or delayed,
thereby causing great anguish and hardship to the flat
owners and their family
5. Many Redevelopment projects have witnessed

prolonged litigation in courts with costly (cost of Lawyers is
very high in metro city like Mumbai) and time consuming
litigation
6. Every member is emotionally attached to property and

in matters of property usually they think long, for next 2-3
generations. The emotional bond is so strong that he is not
willing to settle or compromise a bit. He is not willing to trust
even his own brother. Also, he feels that he has a veto
power, though limited, as a member of the society. If
majority of members resolve then dissenting member has
limited options. It becomes difficult for the society to
proceed further taking everyone along and that is what
courts also have suggested.
7. In a society, decisions are not necessarily taken by the

application of mind by all. Many times some individuals
influence the majority as only a handful are able to evaluate
right and wrong and distinguish between what is talked
about and what is actually being done.
8. Builder is known to face reasonable as well as

unreasonable demands of the members, which have
resulted into his becoming extremely shrewd, thick-skinned
and always ready to face any intricate problem. If need be,
he can be extremely tough and make flat owners’ life
miserable.
9. At present it is the builder who decides what shall be

offered whereas it should the other way round as to what
exactly the society members require from the builder.
Understand the construction and buildings would stick with
members for generations. Hence Society cannot leave the
decisions to builder. Members should not succumb to his
bullying or sweet talks and take decisions judiciously and
stick with these decisions.
10. Amenities. Society & Flat owner should prepare a list of

amenities and should exercise discretion in selection.
a) Building should have 1-2 amenities which would

continually generate revenue for the society such as Party
Hall, Mini theatre, advertisement hoarding/display space,

putting up Mobile Tower etc.
b) Some of the amenities are specific such as separate

area for senior citizens, women, youths, children, toddlers;
c) A large Hall for various activities; Conference Hall cum

Auditorium cum Mini-theatre;
d) Gymnasium;
e) Solar energy;
f) Rain water harvesting,
g) Waste treatment plant,
h) Library; Yoga Centre; Jogging track;
i) Security (electronic as well as physical);
j) Intercom; CCTV;
k) Space for Indoor & Outdoor games;
l) Landscape Garden;
m) Club House (if need be, in collaboration with other

neighbouring societies);
n) Sufficient Parking for members & their guests;
o) Ceiling height 10.5’ to 11.0’, false celling;
p) Guest House;
q) Concierge services; tiffin Services:
r) Common Washing Machines;
s) Compound Wall;
t) Security Cabins;
u) Common toilet;
v) Meter Rooms;
w) Pump Room;
x) Society’s Office;
y) Plumber, electrician etc.
z) Medical-Yoga Centre & Quarantine facility which offers
relief in various ailments.
11. Water problem is going to be critical over the period.

Society should have underground, over-ground tanks;
Borings, Storage Tanks, water Harvesting & swimming pool
should be considered after considering all these things.
12. The size of flats to be built. One of the aims of

Redevelopment was to reunite the separated families. For
want of space, the children who have moved out can now
come back and experience the warmth of a joint
family. Hence at the outset, a survey should be conducted
as to the requirements of various members and the size of
flats required by them. It is essential that harmony is
maintained in the society. It is not necessary that all the flats
be of equal size. But too big or too small size flats may
create complex issue. The common interests, language,
religion, food habits, traditions encourage collective
activities and celebrations.
13. Post Covid 19, there are needs to consider separate

rooms for Work from Home & Study from Home with
appropriate décor, size & internet connectivity.
14. Who will stay where in the new construction? How the
flats would be allotted. This is a very complex problem
requiring patience, goodwill and spirit of let go in common
interest. To eliminate conflict, ask the architect/PMC to draw
provisional maps and decide about the principles of
allotment.
15. Taxation issues: Redevelopment attracts taxes such as

GST & Income tax. These laws are developing and
complications and tax liabilities have to be factored in.
Income Tax is actively pursuing taxation on monetary
benefits received and delay in receipt of possession beyond
36 months to deny benefit u/s 54.
What are the specific issues in Self Redevelopment?
There are difficulties in self-redevelopment.
1) Arranging funds for expenses on approvals, premium on

higher FSI & TDR & construction cost.
2) Construction demands technical expertise in terms of

supervision, care, alertness & vigilance etc. for 2 -3 years,
and who all amongst the members would take
responsibility? Rest of the members would expect that to be
done at no cost or nominal cost. Most members are already
occupied in their job & business and only retired persons
would be available and there are attitude issues with such
people.
3) There are always needle of suspicion towards these

active members as regards some benefits from Contractors,
monetary and special attention for their units including free
or concessional furnishing
4) There would be problems of disposing of extra space in

open market and with transparency.
5) The perennial problem of money laundering would also

haunt.
6) Existing members may get frustrated and give away the

project to the builder, hoping that he would manage
everything and we have to be just prepared to pay his price
Way to smoothly execute Self Redevelopment
Who amongst the members would provide time, energy &

expertise for supervision, care, alertness, vigilance for 2 to 3
years?
We should hire technical expert Project Manager to advice

on technical matter
Kindly note we should not be leaving any decision to builder.

Now builder’s role has undergone transformation.
Society should have CEO for execution of decisions. For

taking our project to fruition, he can be remunerated at
2.5%. Also for selling additional flats over which he has
limited control, a further 2.5% can be given as risk-premium.
As CEO, he represents the society.
The society would have to engage CAs and Tax Consultants

(GST & Income Tax) who is specialist in respective field.
How to raise monies:
We should find financer who invests monies for which we
can give him 10-12% returns.
a) Loan from Banks or other lending institutions against

mortgage;
b) By selling spare space to a corporate house;
c) By associating with venture capitalists;
d) The construction cost in present time is around

Rs.13000 per sq. ft. Members can contribute proportionately
to the space taken by them to start construction going. Also
each member can introduce one new member to lighten the
burden. Once the construction is completed and the total
space accounted for, the members can take back monies
coming to their share.
Consider these points before arriving at final decision.
1. Structural audit of the building: The structural audit

report will determine whether the building should go in for
redevelopment or for major repairs. In the absence of the
technical report it would not be legally permissible to pass a
resolution in the general body meeting for approval of
Redevelopment.
2. Establish the market value of the property: Before

you negotiate with a Developer, you need to establish the
market value of the property you will receive on completion
of redevelopment. This is a better approach than quoting a
random figure to the builder that would make them feel
short-changed or the high amount would make the builder
shy on the new project.
3. Commercial angle in Redevelopment: A Developer

usually assures a certain amount of cash by way of corpus
to take care of higher property taxes payable post
redevelopment, an additional area or a mix of both. He may
give an alternative accommodation for your temporary stay,
foot your rentals or give you a monthly compensation within
which you have to find your temporary accommodation. The
monthly compensation should suitably be agreed upon,
which is equivalent to the prevalent rate of rentals in the
same vicinity. The developer usually pays post-dated
cheques. In case this advance rental is dishonoured, the

society has the right to prevent the builder from either
selling or allowing any new flat purchaser to occupy their
respective flats.
4. Technical angle: Does the finished product match the

quality parameters assured by the builder? In fact, at the
agreement stage itself, the society residents should appoint
a lawyer to draft and finalize the agreement along with PMC
detailing the technical specification and amenities. The
society members should ensure the timely completion of the
project which is the most important detail to be mentioned
in the agreement. Decide upon the quality of buildings you
are aiming at. New technologies are coming into use adding
to durability and strength and also saving construction time.
Now pre-fab technology is also gaining currency. You would
have noticed that corporate houses are ranked according to
their quality or excellence. Thus we come across symbols
like AAA, AA, A+, A, B, B-, which give indication of their
underlying quality. However, it seems, Architects’ or
Engineers’ Associations have not laid down similar
standards for quality of construction. Sometimes, we do
meet cluster of buildings labelled A Type, B Type, but they
refer to area or size and not their quality. If we look around,
we can notice buildings built by SRA, MHADA and by small
builders as also those huge towers built by reputed builders.
Some buildings meet only immediate needs, some are
luxurious and take into account future needs, some give
indication of opulence and status. At present, with rapid
climate change, there is a real apprehension of tsunami,
earthquakes, occurring often. The intensity of an earthquake
is measured on Richter scale. The buildings should either
be earthquake-proof or should be able to withstand
minimum up to 8 on the Richter scale. Ask your
Architect/PMC to give 2-3 alternatives including about the
life of the buildings. It is the durability that decides the
quality of the material to be used as also the cost. Perhaps
more than 500 items are required in construction. We
should be clearly guided as to their quantum, quality, prices
and also as to from what sources the materials would be
procured. If the designated quality material is not available
when needed, the details of the alternative material to be
used and sources thereof should be on hand. These

specifications should be got scrutinized in detail by at least
four different specialist agencies of architects-engineers to
ensure that the final outcome are buildings of our dreams.
The specifications should be open to scrutiny by the
members of the society to ensure their participation in this
far-reaching decision.
5. At present the trend is towards buildings which would

be eco-friendly, environment-compliant and which would
follow Vastu and Green norms. The design should make
enough provision for air, light, sunshine with minimum sound
pollution and be conducive to wellness. Minimum use of
chemicals is desirable. Also surroundings should be clean
and pollution free. Pollution is a silent killer and thus an
enemy of humanity and hence should be treated
accordingly.
6. Fashions are changing. Technology is also fast

changing. Hence there should be no hesitation to refer to
foreign magazines or to consult foreign architects,
engineers. The building should not become obsolete in a
short period of 15-20 years. Also due consideration should
be given to interior decoration to avoid alterations later.
7. Due diligence would have to be exercised to ensure

that the construction is as per the specifications agreed
to. There is always a danger of collusion taking place. The
quality of construction is the life-line of a building and would
determine our peace in future! If the quality is maintained,
there would be fewer problems of leakage, repairs, for the
next 15-20 years.
8. Drafting of the Tender & agreements: The main

parties involved in the any redevelopment project are
Society and Developer. Committee Members dealing on
behalf of cooperative housing society are mostly non-
technical and are laymen. It is very important that the
drafting of the Tender / agreement is done meticulously so
that there is no chance of dispute and/or difference between
both the parties. Excellent skills and vast Legal & Technical
knowledge is required to draft such an important document.
It is very important to avail the services of the professionals
like PMC & Lawyer, who are legally as well as technically
qualified and a person who has the vision to anticipate

future problems and requirements. Bye Law No 158
recommends need of tender document for construction of
building. Redevelopment is usually burdened with bitterness
and complaints of high-handedness and corruption against
the Managing Committee of the society, which is why
society members should always appoint a lawyer before
signing a contract with the builder. Builder should be
transparent, reliable and trustworthy. The most
recommended way to choose a builder is to go by the
tendering system. If the carpet area, as documented in the
agreement, is not given by the builder, the owner can claim
appropriate compensation through a consumer court by
filing a complaint against the builder under the counts of
Breach of Trust, Cheating, Unfair Trade Practice and
Deficiency in Service. The agreement should mention the
time of completion of the project, the size of the new
houses, the mode and nature of monetary compensation, if
it's a one-time payment, reimbursement of rent, or a mix of
both. The developer also has to offers a monthly
compensation in advance along with the brokerage and
transportation charge that the tenant has to incur while
securing an alternate accommodation.
9. Guarantee of performance: In any scheme of

redevelopment, the primary objective is to ensure guarantee
of performance. Performance is principally in the area of
timely construction, quality control and adherence to rules,
and regulations. The contract should clearly mention the
obligations of the builder and the society members and the
penalty or consequences of any breach of the contract by
either of the parties. Once the agreement is accepted in
terms of area and corpus fund, it cannot be revised. The
housing society should insist on a bank guarantee, which
would take care of monetary compensation to ensure the
project is not delayed or stopped midway. "The successful
bidder has to give a bank guarantee equivalent to 20 % of
the total project cost.
10. Criteria for selecting a the builder: The society should

prepare a comparative chart and, after checking the merit,
reputation, technical capability, experience, financial status,
quality of construction and successful completion of
projects, it should select the builder.
11. At the time of vacating the premises, all the members

have to give consent and vacate as per the resolution
passed in the general body meeting. In case, a member
refuses to do so the society or the builder may move the
competent court.
There are several issues pertaining to why many building’s

redevelopment is on hold. Some of the common reasons
are:
Ø Legal issues;
Ø Builder is delaying the project;
Ø Residents and builders aren’t able to settle on agreeable

terms.
How builders can manipulate FSI rules and terms of the

agreement
Builders often twist and grossly violate the rules of by

unlawful planning and constructing additional/unauthorised
areas that are beyond their entitlement. The buyers of such
unlawful flats/properties land themselves in deals that lead
to litigation at a later date. All the demands and negotiations
have to be carefully recorded in the ‘Development
Agreement’ for successful execution of redevelopment in a
housing society and the office bearers and the managing
committee members have a strong role to play. Consider
these points:
a) In any process of redevelopment, one must be aware of

various documentations that are required and also one must
understand the tax implications on redevelopment of
immovable property. The principal documents
are ‘Development Agreement’ and ‘Power of Attorney’ which
are to be registered by paying appropriate stamp duty.
b) By executing the Development Agreement’ with the

Society, the Developer gets the required permission to
develop the land and submits the papers to concerned civic
authorities. Upon various sanctions available to him, the
Developer constructs the buildings at his cost, retains some
flats for him to be sold in the open market and earn profit.
c) When drafting a Development Agreement, some of the

important points and clauses of a Development Agreement
are to be taken care of. The cooperative Society, the
Developer and preferably all the members should be parties
to this agreement. There should be a brief history of how the
conveyance deed was given to the Society. The registration
number of the cooperative Society under the Maharashtra
Co-Operative Societies Act, 1960, should be mentioned in
the agreement.
d) There should be particulars of the existing flats with

carpet area of the flats occupied by each of the member of
the buildings. The area of the plot as per the ‘Property
Register Card’ should be mentioned. The total estimated FSI
area that can be constructed by utilizing TDR on the plot
should be mentioned.
e) Lack of transparency in floor area, (Carpet, Built-up,

Super built-up, Hyper Built-up, saleable area), status of
project (cause of delay, approximate completion time etc),
quality of products used, design philosophy adopted, quality
standards adopted in construction etc.
f) Carpet Area: This is the area of the apartment/building

that does not include the area of the walls. Built-Up Area:
This is the area of the apartment/building including the area
of the walls. Super Built-Up Area: This includes the Built-Up
Area along with the area under common spaces such as the
lobby, lifts, stairs etc. This term is therefore only applicable
for multi-dwelling units.
g) The agreement should clearly mention the carpet area,

including the additional area which will be made available to
the members in the new building. The schedule of payment
of the total consideration should be specified in the
Development Agreement. There should be a mention of the
tentative date for vacating the flats in the old building by the
members which shall be linked with the plans being
approved by the concerned authority.
h) The time period for completion of the new building on

the plot owned by the Society shall be defined in the
Development Agreement. In the event the Developer fails to
complete the entire work within the stipulated period, a

penalty clause can be mentioned in the agreement. It should
be specified in the Development Agreement that from the
date of taking complete vacant possession of the existing
structure till the date of receipt of occupation certificate in
respect of the new building and till such time that the
Developer intimates the members to take possession of
their respective flats, the Developer shall bear and pay all
municipal rates, taxes and other payments required to be
paid to the concerned authorities.
Steps required for Redevelopment of Building of Co-

operative Housing Society
1. Requisition for convening Special General Body

Meeting for Redevelopment of Society’s Building:-
Not less than ¼ members (25%) of the Society the building

of which is to be redeveloped should submit a requisition to
Secretary on the Managing Committee elected as per
provisions of Bye-Laws and lawfully formed along with their
scheme and suggestions for redevelopment of the Society’s
building for convening Special General Body Meeting to
finalize the policy on redevelopment of the building.
2. Convening Special General Body Meeting:-On receipt

of an application as per Directive No. 1 above, Managing
Committee should take a note thereof within 8 days and
Secretary of the society should convene General Body
Meeting of all the members of the society, Agenda of the
Meeting should be furnished to each member 14 days prior
to the day of meeting and acknowledgement thereof should
be kept on record of the society.
Before convening the said meeting, Society should obtain

list of Architects / Project Management Consultants on the
panel of Government / Local Authority and obtain quotations
from minimum 5 experienced and expert persons for
preparing project report for redevelopment work of the
building and one expert person from among them will be
selected in the Special General Body Meeting
3. Following business will be transacted in the said Special
General Body Meeting:-
1. To take preliminary decision by taking into consideration

demand of the members for redevelopment of society’s
building and suggestions received in respect of the same.
2. To select expert and experienced Architect / Project

Management Consultant on the panel of the Government /
Local Authority for work of redevelopment of the building
and to finalize items of work to be done by them and terms
and conditions of work.
3. To submit outline of the program for redevelopment of the

building.
3. To accept written suggestions from members relating to

redevelopment of the building:-
Members of the Society will be entitled to submit in writing

to the committee eight days prior to the meeting their
realistic scheme, Suggestions and recommendations for
redevelopment of the building in the name of experienced
and expert Architect / Project Management Consultant
known to them. However, that Architect / Project
Management Consultant should submit a letter that he is
desirous of doing work of redevelopment.
4. Decisions to be taken in the Special General Body

Meeting:-
Quorum for the Special General Body Meeting convened for

redevelopment of building of the Co-operative Housing
Society will be ¾ of the total members of the society. If
quorum is not formed, meeting will be adjourned for eight
days and if there is no quorum for the adjourned meeting, it
will be deemed that members are not interested in
redevelopment of the building and meeting will be
cancelled.
On formation of quorum for the meeting, Suggestions,

recommendations and objections from all the members with
regard to redevelopment of the society’s building will be
taken into consideration and opinions expressed by all the
members will be recorded in the minutes book with names
of concerned members. Therefore a preliminary decision will
be taken whether to redevelop society’s building or not.
Such decision must be taken with majority vote of more than

¾ of the members. On preliminary resolution about doing
the work of redevelopment getting passed, following
business will be transacted in the meeting:
a) To selected expert and experienced Architect / Project

Management Consultant from the panel of the Government /
Local Authority for work of redevelopment of the building
and to finalize items of work to be done by them and terms
and conditions for the same.
b) To submit an outline of the program for redevelopment of

building.
5. Providing minutes of Meeting to all members:-
Secretary of the Society should prepare minutes of Special

General Body Meeting as above within ten days and a copy
thereof should be furnished to all members and
acknowledgement therefore be kept on record of the
society. Also one copy should be forwarded to the office of
the Registrar.
6. Issuing Appointment Letter to the Architect / Project

Management Consultant:-
Secretary of the society will within 15 days of the meeting

issue Appointment Letter to the Architect / Project
Management Consultant selected in Special General Body
Meeting and Society will enter into an agreement with
Architect / Project Management Consultant incorporating
therein terms and conditions approved in Special General
Body Meeting.
7. Work to be done in the initial stage by Architect /

Project management consultant:-
a) To survey Society’s building and land.
b) To obtain information about conveyance of land to the

society.
c) To take into consideration prevailing policy of the

Government and the regulations applicable from time to
time depending on ownership of the land
(MHADA/SRA/Municipal Corporation) and to obtain
information about FSI and TDR, which would be available in
relation to building and land of the society.
d) To take into consideration suggestions and

recommendations from the members for redevelopment of
the building as also the residential area to be made available
to the members, commercial area, vacant area, garden,
parking, building specifications etc. and to prepare a realistic
project report.
e) Architect / Project Management Consultant should

prepare the project report within two months of date of his
appointment and to submit the same to committee of the
society.
8. Action to be taken on receipt of redevelopment Project

Report:-
a) On receipt of Redevelopment Project Report as above,

Secretary of the society will convene a joint meeting to
approve the Project Report with majority vote by taking into
consideration suggestions received from Committee
Members and Architect / Project Management Consultant.
Notice in that behalf will be published on the Notice Board of
the Society mentioning time venue etc. of the meeting.
b) It should be mentioned in the notice that a copy of the

Project Report is available in the society’s office for
members to see and the notice should be served on all the
members that they should submit their suggestions eight
days prior to the next Committee Meeting and
acknowledgement of such notice should be kept on record
of the Society.
c) Seven days prior to joint meeting, suggestions received

from the members will be forwarded by Society’s Secretary
to the Architect / Project Management Consultant for his
Information.
d) There will be a detailed discussion in the Joint meeting on

the suggestions / recommendations from members and
opinion thereon of the Architect / Project Management
Consultant and project report will be approved with
necessary changes. Thereafter draft of tender from will be
prepared and date of next joint meeting will be fixed for
discussion on draft tender form and finalizing the same.
e) While preparing draft tender form, in order to get

competitive quotations from renowned experts and
experienced Developer, either carpet area or corpus fund
fixed (not to be changed) and by finalizing other technical
matters, the Architect / Project Management Consultant will
invite tenders. Society’s members will be entitled to furnish
information about it to the reputed and experienced
Developer known to them.
9. Preparing List of Bids Received:-
a) On the Last day for receiving quotations, Secretary of the

Society will prepare a list of offers received and display the
same on the notice board of the society.
After 15 days of the last day for receiving quotations,

Secretary of the society will convene special meeting of
Managing Committee of the society. Authorized
representatives of bidders and members of the society
desirous of remaining present can remain present for the
meeting as observers.
Tenders so received will be opened in the presence of all

and the Architect / Project management consultant will
scrutinize all tenders and prepare a comparative chart and
after checking merit, reputation, experience and
comparative rate etc. and select minimum 5 bids and if the
bids received are less than 5, all the bids for putting up
before Special General Meeting and concerned bidders will
be informed about it immediately.
10. Selection of Developer:-
a) Office of the Registrar to appoint Authorized officer for

attending General Body Meeting:-
An application with list of the members should be sent

within eight days to the registrar for appointment of
Authorized officer to attend the Special General Meeting of
the Society for selecting a Developer out of those selected
by committee of the Society with the help of the consultant,
by taking into consideration his experience, merit, financial
capacity, technical capacity and competitive rate etc.
b) Convening Special General Body Meeting for finalizing

tender:-
After appointment of authorized officer, with his prior

permission Secretary of the Society will fix the time and
venue convene Special General Body Meeting for
appointment of Developer and Agenda of this meeting will
be sent to all the members 14 days prior to the meeting by
hand delivery and by registered post and keep
acknowledgement thereof on record of the Society. Also,
office of the Registrar will make arrangement to keep his
authorized representative present for the meeting.
Also arrangement will be made for video shooting of the

meeting at the cost of the Society. Any person other than
formal members will not be entitled to attend this meeting.
Therefore members will be required to present at the venue
of the meeting with their Identity Cards. At the time of
submitting redevelopment proposal to the concerned
authority for sanctioning, selection of Developer and other
work should have been done in the presence of authorized
officer from Registrar’s office.
c) If there is no quorum for Special General Body Meeting:-
If the quorum of ¾ members out of total members is not

formed for Special General Body Meeting, the meeting will
be adjourned for eight days. If quorum does not get formed
for adjourned meeting, it will be deemed that the members
have no interest in redevelopment of the building and the
meeting will be cancelled and thereafter the said subject will
not be taken up before the Special General Body Meeting for
approval.
d) In the Special General Body Meeting to be convened for

selection of Developer, authorized representative from the
office of the Registrar will be present and observe
proceedings of the meeting. Also, on concerned
representatives and authorized officer remaining present at
the venue and at the time of meeting and on quorum of ¾
members getting formed, following business will be
transacted in the meeting.
a. Providing comparative information in respect of

tenders selected for presentation (for redevelopment work).
b. Presentation by bidders one by one.
c. To select Developer for redevelopment of the building,

to finalize terms and conditions and finalize the tender.
d. To obtain consent from the selected Developer.
e. Give information about further work. It will be essential

to take written approval by ¾ majority vote of the members
present for the meeting for selection of Developer. If the
selected Developer of his representative does not remain
present for the meeting, further action will be taken by
presuming that they have given their consent for the project.
11. Agreement to be entered into with Developer:-
Subject to the terms and conditions approved by General

Body Meeting of the Society, an agreement should be
entered into with the Developer within one month under
guidance from the Architect / Project Management
Consultant. Along with the points suggested by the
Architect / Project Management Consultant appointed by
the Society, following points will also be included in the
agreement.
(1) The period for completing redevelopment project of the

Society will not exceed more than two years and in
exceptional cases, it will not exceed three years.
(2) Developer will give a Bank Guarantee for amount equal to

20% of the project cost.
(3) During the period of redevelopment, the Developer will

make available to the members alternative accommodation
in the same area as far as possible or arrange to pay
monthly rent and deposit as acceptable to members or
make available transit camp accommodation.
(4) The said agreement will be registered under Registration

Act, 1908.
(5) On completion of redevelopment project, new members

will be admitted in the Society only with approval of General
Body Meeting of the Society.
(6) Carpet area to be allotted should be clearly mentioned in

the agreement.
(7) Development right vested in the Developer will be non-
transferable.
(8) Members will vacate their respective premises only after

all legal approvals are received for redevelopment of the
building.
(9) Rights of those who are in possession of the flats will

remain unaffected.
(10) If any dispute arises in the work of redevelopment,

provision should be made in the agreement to resolve the
same as per provisions of Section 91 of the Act.
(11) After receipt of Occupation Certificate, flats in the

redeveloped building should as far as possible be allotted as
per present conditions floor-wise and if it becomes
necessary to allot flats by drawing lots, on completion of
construction, Developer should make arrangement drawing
lots, and at that time flats should be allotted in the presence
of Registrar’s representative and this process be recorded
by video shooting.
(12) Any Committee member or Office Bearer of the Society

should not be the Developer or relative of the Developer.
(13) Building plans sanctioned by the Municipal Corporation

/ Competent Authority should be put up before the General
Body Meeting for information and if any member wants
copies of approved documents, he should submit
application for the same to the Society and it will be binding
on the Committee to furnish the information by charging
necessary fee.
(14) Please ensure the project is RERA-registered and that

sufficient research is done about the builder to ensure they
have a good track record.
Builder/Developer of Redevelopment of Housing Society
One of the prime factors for successful completion of any

Redevelopment Project is a selection of a good Builder. One
of the things that cause the most stress when any Housing
Society starts a redevelopment process, is finding a good
and reliable Builder. Selecting a Builder, negotiating various
terms and dealing with them and their team is one of the
most stressful things is like finding a bride or groom, good

family, settled and organizing a wedding.
In Mumbai, increasing costs and short of space make it

impossible for residents to move out of ageing and
dilapidated Housing Societies and for them, the concept of
redevelopment has become dream come true to have new
and better houses to stay.
Thousands of older Housing Societies are showing signs of

serious concerns with regard to repairs and upkeep of
depilated & deteriorating building. There are distinct safety
and security issues and a complete absence of modern
amenities. Under the circumstances, redevelopment is the
only solution being a sensible and practical.
Concerns about Builder
However, while many Builders sell the dream of

redevelopment to Housing Societies, there have been
several cases where the dream has turned into a
nightmare for middle class families residing in these
Societies. Even the reputed Builders have dodged in
maintaining the terms of redevelopment projects.
Selecting an accountable and trustworthy Builder is a

difficult task to ensure successful redevelopment. A
redevelopment project going wrong can have disastrous
consequences for all residents and it is invariably the
Housing Society's Managing Committee that becomes the
scapegoat.
In redevelopment, prevention is most definitely better than

the cure. A failed redevelopment can be avoided by
adhering to a proper process while selecting a Builder to
partner with. Once the Builder is finalized, it is important to
incorporate in the Development Agreement all the legal
terms through an expert who is well versed with various laws
of redevelopment that safeguard the interests of the Society
and its Members. This can eliminate the possibility of
discrepant situation at a later date to a significant extent.
A plumber requires a licence, and so does an electrician. But

a builder only requires a sweet tongue and a smiling face.
They do not require a licence to operate. With MOFA
(Maharashtra Ownership Flats Act) in place, education is

there for estate agents, but I believe that more education is
required for the builder community. They do so many wrong
things just for profit,”
As per the stipulated rules and regulations, for a society to

opt for redevelopment, its conveyance has to be completed
first. To complete conveyance, society needs to have the
property card in the name of the rightful legal entity, and the
property owner should join as a ‘confirming party’ as per the
clauses in the model agreement.
However, builders have continued to exploit the ignorance of

consumers blatantly. While the law stipulates that the
property owner should be joined as a confirming party in an
agreement, Despite this clause, the rules are being openly
flouted by the builders. Banks are more than willing to give
loans to the builder, even when they know it is a mistake
being committed by them. It is, unfortunately, a very corrupt
process.
Problems such as “promise of unrealistic targets, insufficient

funds, corruption, the difficulty of pleasing all stakeholders,
tax burden and stamp duty implications, are unfortunately
common when opting for redevelopment.” But each issue
can be handled and addressed if planned for in advance.
Checklist for Selection of a Builder for Redevelopment of

Housing Society
While selecting a Builder, both financial and quality

aspects need to be considered.
Most societies focus on only quantitative financial terms

which include the carpet area offered to each society
member, the corpus amount offered, rent for alternative
accommodation, shifting charges and penalties.
What ignored here are the qualitative aspects of the

Builder which would include past experience and track
record.
Extensive research needs to be done on the Builder's

construction, marketing and legal track record. Some of
finer areas that need to be considered are:
1) Does the Builder have a strong brand?
2) How many Redevelopment Projects he has undertaken

for MHADA Buildings?
3) Experience of converting Leasehold to Freehold with

MHADA
4) Is the habitable area of the redevelopment at par with

the quality and brand of the Builder's saleable portion?
5) Is the Builder known for violation of acts and rules

laid down by authorities?
6) How many litigations and with which Societies and

types of disputes, time taken to arrive at solution of issues
7) What are the systems, structure and strategy of the

Builder?
8) Does he have strong in-house construction and

marketing teams for execution?
9) Does he have a record of cost and time overruns?
10) What is his level of implementation expertise? Range

of completion of Project in terms of months ____months
minimum, ________maximum and average per
project______
11) How well-connected is he and how adept at obtaining

necessary approvals from various authorities on time?
MHADA, Fire Safety, Flight Path, Environment, BMC,
12) Is he knowledgeable about and comfortable with the

local environment? He may have to handle unforeseen
hurdles that are always potentially a part of redevelopment
projects.
13) Political affiliation of Builder & their Promoters/Owners.

Any indirect control from Politician in the project?
14) What are the Builder's abilities in terms of raising

equity and debt funding?
15) Does he use a transparent and consistent financial

accounting policy?
16) Tax Litigation, history of Raids (Searches and Surveys)

from GST, Income Tax, VAT (Earlier)
17) History of Accidents in his sites.
18) What is his current fund availability and funding

pattern?
19) Is he easily available to the Society in case of any

emergency?
The Society should carry out analytical check of at least

two or three other Societies where the Builder has
constructed and delivered the similar projects. It is
essential to establish whether he adheres to promises on
quality and timelines as documented in the Development
Agreement and provides sound infrastructure and finishes.
Given the complexities involved in the Mumbai real estate

market, there is no single, standard solution in
redevelopment. The process involved in a Builder search
should be customized, flexible, transparent and in line with
the redevelopment rules. The commercial offers from
potential Builders should be driven by competition rather
than price.
Here are certain important criterions to observe about a

selection of a genuine Builder. Never ever select a Builder
simply on the basis of his financial offers and exorbitant
increase in carpet area and promises to provide amazing
and astonishing amenities etc. His selection should be
exclusively being based on his merit, reputation, technical
capability, experience, financial status, quality of
construction and successful completion of his earlier
projects etc.
1. Visit their Website – Visit their website to know

whether they have good reputation and who are their clients.
Ask for those references and see if you can view work they
have done previously that is similar to the project you are
starting. This will give you the opportunity to speak to other
clients and look at the quality and durability of the work.
2. Start dates – A reputed Builder will always be busy.

You should be prepared to have to wait several weeks or
even a few months before your Builder is able to commence
the redevelopment process. When you ask them to quote for
the same, talk to them about when they might be able to
start. Someone who can start immediately may not be the

Builder for you.
3. Builders who “cold call” – Good Builders are always in

demand and always busy. They never turn up on your
doorstep asking if they can undertake your redevelopment
project. If a Builder knocks on your door and offers to do a
job, turn them away.
4. Construction period – A redevelopment project may

take couple of years or maximum three for completion,
depending on the scale of property, after the work
commences on the site. The Builder should ensure timely
completion, physical possession, as committed to the
Society. It shall be Builder’s responsibility to obtain
Occupancy Certificate from the Municipal Authority.
However, the Builder will have to pay the rent for the period
until he delivers the new property after the Occupancy
Certificate is received.
5. Experience – As within any profession, a Builder will

have a certain amount of experience for their progression
within the trade. This experience is what the well-known and
reputed Builder will draw upon when redevelopment project
is undertaken and that is why it is important to hire an
eminent Builder who has the type of experienced team you
can rely upon.
6. Knowledge – A professional Builder will always do their

best to ensure that they have this level of knowledge
throughout every part of their work and service. This means
that not only will they have the necessary technical
knowledge but they will also have knowledge of other
professional local tradesmen working within the area,
various permits required in the construction work being
undertaken on your property and the specialized building
regulations which will need to be adhered to at all times
during the construction work. This in-depth knowledge
possessed by the professional Builder will help guarantee
that your construction work will be at the right time, using
the right materials for the right price. Needless to say
knowledge is invaluable.
7. Safety – The knowledge which is possessed by a
professional Builder is also a vital part of the customer

having the peace of mind that the construction work has
been undertaken with all safety measures at the forefront.
This means that not only will the completed work on your
property safely adhere to all the relevant building regulations
but it will also ensure that it should add value to your home.
8. Quality of Construction –The Builders must ensure

good quality materials and proper workmanship.
Specifications as per Development Agreement should be
adhered to and statutory specifications of the Local
Planning Authority should be complied with. Proper
technical supervision on site should be ensured through
qualified and experienced technical personnel in addition to
usual qualified structural engineers and architects.
9. Defects Liability Clause – Builder should incorporate

in Development Agreement, a clause for defect liability for a
minimum period of 36 months or as per prevailing laws from
the date of handing over of possession or intimation to the
Society upon receiving the Occupancy Certificate from
Municipality regarding the readiness to hand over
possession, whichever is earlier and which shall be limited to
the defects in the construction (i.e. structure) and not on the
bought out materials most of which are covered under
varied warranty periods by the manufacturers themselves.
However, in the event of recurring problem with the bought
out materials, the member shall co-operate with the
purchaser in sorting out the issue. This defect liability shall
not cover force majeure situations such as damage resulting
from war, flood, earthquakes etc.
10. Availability – A professional Builder will probably be

busy with other jobs and you may have to wait for them to fit
you in. If a Builder says they can start the next day, they may
not be the professional Builder you are looking for.
11. Plans – A professional Builder adheres to the plans and

ensures that no unauthorized construction is carried out
which may subject the Society for distasteful and repulsive
action from the Municipal Authorities at a later date. Builders
who don’t want to work from plans should be regarded with
suspicion – particularly as the planning department and
building regulations officers will want to ensure that the
building is going up exactly as approved.
12. Tender Document – Tender Document should contain

extensive and genuine details on Financial, Technical and
General Information of the Builder. Make sure to get the
information on present or past litigation cases in any Court
against the Builder by way of declaration.
Documents required for Redevelopment of society
1. Conveyance Deed: Society needs to obtain

conveyance in the name of the society, if builder/land owner
not willing to provide conveyance, follow the deemed
conveyance route
2. Property Card (PR Card): Property card should reflect

the ownership in society name, if it doesn’t reflect even after
obtaining conveyance please visit your city survey office of
your ward and get it corrected
3. Obtain Fresh Property Card (PR Card): Get the latest

PR card duly certified from your city survey officer with plot
area in figures and words.
Note: PR Card is valid only for a year
Property Card Offices in Mumbai: https://www.e-

stampdutyreadyreckoner.com/property-card-offices-
msd.php
4. City Survey Plan: Obtain the latest City Survey Plan of

the property from your City Survey Office
5. Lease Deed & Renewal of Lease: In case your lease if

over or to get over soon when the plot is lease hold, get the
lease renewed
6. Society Registration Certificate
7. 7/12 Extract
8. Form No. 6 from Revenue Office
9. Search Report & Title Certificate
10. Index II
11. N.A. Order
12. City Survey Plan
13. OC (Occupancy Certificate)
14. CC (Completion Certificate)
Documents (Copies) Required from Members
a) Stamp Duty paid proof of all members
b) Registration charges paid proof
c) Share Certificate
d) Sale Deed, Allotment Letter, Agreement to sale (Regd.)

evidencing ownership of Flat)
Technical Documents required for redevelopment of

society:
1. OLD BMC plan of existing building: Check your

society records if you have the old BMC and IODCC of your
existing structure which your developer would have
submitted at the time of construction. This will help you
ascertain the carpet area of your existing members If your
society doesn’t have the document’s visit your BMC office
ask them to search through the records
2. Physical Survey of plot and flats: If there is dispute in

terms of carpet area and plot size , please get the plot
surveyed and flat measured through a licenced surveyor
3. DP Remarks: Obtain the fresh DP remarks of your plot

from your local BMC
4. Structural Audit: Obtain a fresh structural report of

your existing structure to ascertain the durability and
longevity and carry out the required repairs and restorations
as suggested by your structural consultants
Documents (copies) of Developer/Builder required
a) MCA or Registrar of Firm’s Certificate
b) PAN Card
c) Last 3 year’s Income Tax Assessment orders along

with copy of orders from CIT (Appeals), ITAT
d) Last 3 years GST annual Return along with assessment

order.
e) Certificate from Company’s Auditor about pending tax

dues & pending litigation and quantification of tax liability in
respect of pending litigations
f) Profile of Company
g) Name and address of all partners / directors along with

their PAN
h) Last 3 years Audited Accounts along with annual report

of entire group and all partners / directors of the company &
Group
Documents during process of redevelopment
1. Feasibility report
2. MOU between Developer & Society (draft duly

approved at AGM with authority given to select members of
the Committee to execute this)
3. Indemnity from Committee members that they would

not seek & get any extra benefits from the Developer and its
confirmation from the Developer
4. Development Agreement
5. Indemnity Bond and Bank Guarantee from the

Developer
6. Suggestions from members.
7. Public notice for inviting the tender.
8. Minutes of various meetings.
9. Correspondence with different authorities.
10. Obtaining permission from deputy registrar.
11. Tender form.
12. Summary of tenders received.
13. Approval of tenders in the general body meetings and

preparation of draft and final minutes.
14. Appointment letters to advocate, structural engineers,

architect, project management consultant etc.
Agreements & letters required during redevelopment
1. Redevelopment agreement
2. Format of bank guarantee from the builder
3. Power of authority from the society to the developer
4. Agreement for alternate accommodation
5. MOU between the society and builder / developer
6. Appointment letter from the society to the builder /

developer
7. Revocation / cancellation of power of attorney
8. Other duties associated with advocate
9. Possession letter from the builder to the members
10. Format of the resolution to admit new members
11. List of documents required being collected from the

builder
12. Indemnity bond by the developer
13. Consent letters from the members to the society
Conclusions
To sum up, a good Builder is expected of lot of thoughtful

process of redevelopment, knowledge, experience and
expertise in design, planning, construction and executing
the same with passion to deliver human friendly projects.
The Builder selected, should be of unshakable reputation for
quality, efficiency, trust, meticulous planning, top quality
amenities, superlative designs, timely completion,
guaranteed possessions and handing over of property of the
Society for rehabilitation of its members.
Please educate yourself and caution your friendly

neighbours to be vigilant from Irregularities and illegalities in
Redevelopment by the Builders, Illegal gratifications
showered by Builders on corrupt members of Managing
Committees, Rampant Corruption in MHADA, BMC, Flagrant
violation of Rules and Regulations by the Builders, how to
beware of Cheat and Fraud Builders and their criminal and
felonious acts.
CA Harshad Shah, Mumbai harshadshah1953@yahoo.com
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Harshad Shah 142 articles Follow
Chartered Accountant at Independent Practice
Published • 3mo
Redevelopment Checklist, Issues, Malpractices, Concerns What is

Redevelopment? Redevelopment refers to the process of reconstruction of the
residential/commercial premises by demolition of the existing structure and
construction of a new structure in its place. This is done by utilizing the potential
of the land by exploiting additional TDR, higher FSI as specified under the latest
Development Control Regulations (DCR). Redevelopment of old buildings is
changing the face of Mumbai. Why Redevelopment? a. Building in dilapidated
condition b. After certain age (Building after 30+ years), due to wear and tear
and exposure to natural elements, building become weak c. Impact from
corrosion particularly in cities like Mumbai which reduces life of building and old
buildings are unable to withstand adverse conditions d. Uneconomic to repair
as cost of major repair is sometimes more than reconstruction e. Current
building has no Lift causing hardships to aged residents needing redeveloped
tower with Lift f. Structural repair is not economically feasible to take care of
seepage, weak walls and foundations, leaking water pipes, etc g. Occupants
(owners or tenants) need more area due to expansion of family size with change
of generation h. Aspiration of many occupants have gone up with Indian
Economy doing well and they crave for more space and luxurious building with
modern & luxurious amenities like Sports, Clubs & health related facilities
i. Property prices have sky rocketed making it unaffordable for many owners
to look for larger which may be beyond their budget j. With redevelopment,
the members get a new building, more space and monetary benefits without
spending any money from their own pockets k. Building has unused
development rights where they can build a new and higher structure where the
additional space can be partly given to existing members and partly sold for a tidy
profit (particularly in self-redevelopment) l. Horizontal expansion is not
feasible in a landlocked island city like Mumbai and thus vertical expansion
through redeveloping existing building in a tall towers become only option
m. Horizontal expansion means need of more roads, transportation, drainage
pipe lines and that comes with heavy cost. n. State government and
municipality is giving concessions (of higher FSI, TDRs with lower premium,
transparent & speedy approvals) for Redevelopment Projects Why few Rebellious
Members Obstruct Redevelopment of Housing Societies Important Caveats
Redevelopment of MHADA Buildings Issues in Redevelopment Consider these
points before arriving at final decision Steps required for Redevelopment of
Building of Co-operative Housing Society Concerns about Builder Checklist for
Redevelopment of Housing Society #redevelopment #housing #society
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Jay Kokusolar Vyas • 3rd+ 2mo

Certified Solar Installer, Trainer & Author. Specialized in Cutting Costs,
Saving Money and Nature.
Very nicely written!
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Harshad Shah • 3rd+ 2mo

Thanks
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Vijay Mandore • 3rd+ 2mo

IT Head at Elite Brands Pvt Ltd
Excellent guide for redevelopment!
Like Reply
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Redevelopment Checklist, Issues, Malpractices, Concerns | LinkedIn 30/06/23, 4:50 PM

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Redevelopment refers to the process of reconstruction of

In most metro cities of developing country like

a. Building in dilapidated condition

b. After certain age (Building after 30+ years), due to

c. Impact from corrosion particularly in cities like

seismic zones with frequent earth quakes etc.)

d. Uneconomic to repair as cost of major repair is

e. Current building has no Lift causing hardships to

f. Structural repair is not economically feasible to take

g. Occupants (owners or tenants) need more area due to

h. Aspiration of many occupants have gone up with

i. Property prices have sky rocketed making it

j. With redevelopment, the members get a new building,

k. Building has unused development rights where they

l. Horizontal expansion is not feasible in a landlocked

m. Even in the case of non-landlocked city, horizontal

n. State government and municipality is giving

Why few Rebellious Members Obstruct Redevelopment

Many judgments delivered by the Bombay High Court have

Redevelopment of housing societies in Mumbai witnesses a

The only option for such minority members is to take the

Reasons of these rebellious members

Ø The process of redevelopment being not taken up in

Ø Senior and aged members refuse to shift themselves to

Ø Elements of frauds or favouritism involved

Ø Suspicion & allegations of Ungrateful benefits received by

Ø Arm-twisting tactics or high handed attitude by the

However, it has to be proved that there is some prejudice

2) Redevelopment through Builders

3) Slums redevelopment (used as an urban renewal

4) Redevelopment of Tenanted Buildings

In self-redevelopment, flat owner get extra space and

Redevelopment through Builders is widely followed model

interested in small size project. However there have been

Cluster Development is the economic growth of entire

Important Caveat: For an old building to go for

1. The building should have completed 30 years or are

2. To be certified by the Govt. approved architect on

3. Building should have Conveyance in its name. Over

4. Income tax impact on redevelopment has to be

Housing societies in ultra-premium south Mumbai,

Redevelopment fever has now gripped some of the top

The residents occupy flats ranging from 1,300 sq. ft. to

Societies prefer A Grade developers because of the

Several societies at ultra-premium locations such as

Redevelopment of MHADA Buildings

All redevelopment agreements in the MHADA layout will now

The state’s housing department issued a GR on the change

on 16th March 2021. MHADA has 56 layouts in Mumbai, and

MHADA mainly constructs residential buildings for

“Since MHADA only issues NOCs, in case of breach of the

Builders pay a premium to MHADA for getting more

MHADA had cleared many stalled projects and had given

Allowing redevelopment of non-cess buildings under 33(7)

was not a viable option.

The Bombay High Court has ruled that rehabilitation

This judgment will be treated as an exact interpretation of

What are the issues in Redevelopment?

There are Risks and challenges in building redevelopment

1. Societies are in a dilemma whether they should self-