Redevelopment of Housing Societies reviews and complaints

Redevelopmentof housing societies... what is redevelopment that every society wants to know?

Redevelopment is the process of demolishing existing old society building and reconstructing it by appointing a good developer who can construct and handover new flats to the society members free of cost with some additional benefits and make profit by utilizing balance plot potential by constructing additional flats and shops as per approval from m. c. g. m.

Today the societies are opting to go for redevelopment for certain reasons such as the repair work can increase life of the building by 3 to 4 years and the problems can reoccur after few years, the old buildings are designed with old construction norms and hence cannot withstand with new climatic and geographic conditions, for repairs members have to spend money and in old building the steel inside concrete beams and column starts corroding after 15-20 years which cannot be treated in repairs.

On the other hand, the redevelopment gives a new building for which no major repairs required for longer period, new building is constructed with new construction norms and hence can withstand with new climatic and geographic conditions, the members get benefits in terms of money as well as additional area with latest amenities.

The redevelopment method though within last few years that has hit mumbai with great potential but has, by and large, also seen disagreement from members of the society time and again. redevelopment projects have often collapsed due to the growing demands of the members in majority. there is a high level of diffidence amongst the members when the idea of redevelopment is proposed. there is persistent fear of insecurity whether the builder will deliver the redeveloped property or leave it intermediately.

As we all know that the builder is earning generous amount out of a redevelopment project and hence, the members start becoming more desirous at times. there are rounds of negotiations before a time to finalize the conclusive agreement is reached. the major reason for failure of many redevelopment projects is that the members themselves don’t trust the office bearers and members of their managing committee.

As the managing committee handles the entire process, often there is a suspicion of their being hand in gloves with the builder and at times, it is assumed to have been true as the managing committee members also look forward for their life time personal gains rather than ensuring a fair deal for members or the corporate interest of the society.

First and foremost, the housing society members must ensure that their office-bearers and the members of the managing committee are elected as per the provisions of maharashtra co-operative societies act, rules and bye-laws.in short, please ensure that the entire managing committee is lawfully formed.

Secondly, it is learnt that in many societies, the managing committees, who execute the documents with the developers, do not possess any legal holding as they have never filed/nor aware of filing the indemnity bond in form m-20 on a stamp required under section 73 (1ab) and rule 58a of the maharashtra cooperative societies act 1960.

The members who fail to execute such bonds within the specific period are deemed to have vacated his office as a member of the committee and no legal effects can be given to the documents executed by them with the developers and the entire exercise of redevelopment efforts will come to a zero if the mandatory filing of indemnity bonds in form m 20 is not filed within 15 days of their assuming the office (within 45 days with effect from 14/1/2011). even a delay of one day and the entire managing committee including office bearers shall have no legal footing to run the society!
Redevelopment of housing societies is usually burdened with bitterness and complaints of high-handedness and corruption against the managing committee.

Hence, with a view to ensure transparency in societies seeking to undertake redevelopment projects, the state co-operative department has, for the first time, issued guidelines for societies to follow under section 79 (a) of the maharashtra co-operatives act, 1960.

The guidelines are issued by a committee comprising the co-operatives commissioner and cidco chairman pursuant to a deep study of complaints by members of housing societies undertaking the redevelopment of their property. according to an important feature in the guidelines, a redevelopment scheme has to be approved by the general body only if three-fourths of the society members are present at the meeting.

The special general body has to approve the bid of the successful bidder in a meeting attended by the registrar. the entire proceeding has to be video-recorded. once the agreement is accepted in terms of area and corpus fund, it cannot be revised. the successful bidder has to give a bank guarantee equivalent to 20% of the total project cost to show his financial strength, and proof that he will not throw away the project midway.

The developer has to complete the redevelopment project in two years, or a maximum of three years. the development agreement must be signed on carpet-area basis. most importantly, if, for some reason, the successful developer is unable to complete the project, he cannot sell or assign his redevelopment work to another developer.

It has been often noticed that during the process of redevelopment, the terms of development agreements as agreed upon, are later twisted and grossly violated by the developers and the ground rules of mrtp and dcr by unlawful planning are flouted by constructing additional/unauthorized areas that are beyond the entitlement (i. e. beyond the plot fsi and the tdr/fsi loaded) for their hidden financial gains. the buyers of such unlawful flats/properties land themselves in deals that lead to litigation at a later date.

At times, upon the completion of the project, there are major inconsistencies and discriminatory features noticed in the approved plans v/s actual layouts, measurements and other aspects in respect of the constructions of residential area and the commercial area which may not be in conformity with the development agreement originally executed between the society and the developer.

Under right to information act, the housing society can procure all the plans and the related documentary evidences from mcgm duly attested by two senior engineers of the building proposals dept. to study the anomalies which exist in execution of the entire redevelopment project even after the occupancy certificate is issued.

It has also been observed that the deviation of vital rules and guidelines of mrtp/mcgm/dcr are conveniently overlooked by few corrupt and dishonest but “sympathetic officials” of mcgm and the final plans with numerous anomalies so submitted by the said developer are approved by them without verifying the justifiability or its conformity with the development agreement executed with the society.

Importance of project management consultant in redevelopment

Documents required to be furnished by the society to the developer: conveyance deed, society registration certificate, general body resolution to go for redevelopment, list of member with their respective carpet areas. c. t. s. plan & property card for the plot, d. p. remarks, if the property is under tps scheme then t. p. remarks and copy of municipal approval plans.

The importance of project management consultant in redevelopment: a consultant is basically a team of architects, civil engineers and legal advisors.

An architect is required to prepare financial feasibility of project, technical analysis of offers of developers, verifications of building plans prepared by the developers and preparation of schedule of municipal process with developer.

The civil engineer is required to cross check r. c. c. drawings of the proposed building and check onsite quality of the construction.

Legal advisor is required to prepare development agreement and individual mofa agreements of society members of developers and check other legal aspects of the proposal.

A well adept project management consultant can guide the society through entire process of redevelopment so that the members can get the maximum benefits from the builder and at any stage of redevelopment members do not get cheated by the developer. some of the duties of project management consultant are given hereunder.

Preparation of financial and technical feasibility report by studying existing building plans, consumed fsi, carpet area of existing members & available tdr / additional fsi benefits so that maximum benefits the members can demand from the developers.

Preparation of tender document: "tender" is a crucial document, which is to be designed meticulously to avoid any kind of misunderstanding/argument during the course of project. it contain various information to bidder, technical and financial specifications, general conditions and detailed specifications which makes it easier to evaluate the offers received since they are given on the same base.

Preparation of comparative chart of developers: a chart showing the comparative analysis of all the offers is to be prepared to get the idea of the best offer received. ranking shall be given to developers.

Finalization of developer: on the basis of ranking, the projects carried out by the developers inspected, their market reputation checked and accordingly the best developer is recommended to the society.

Preparation of development agreement: while preparation of development agreement between society and developer inputs are given in terms of technical clauses which would safe guard the interest of the society and safety of the project.

Finalization of building plans: the plans of proposed building prepared by the developers are to be verified in respect of planning, carpet area, area calculations, legalization and authorization of the area allotted to the members.

Vacating the building after the builder obtains the necessary permission: the care taken that the necessary permissions are obtained and legal formalities are fulfilled to secure the project by the developer before he ask the members to vacate the premises so that the project doesn't stuck up after demolition of the building.

Demolition and reconstruction of building: after demolition and during construction of building the regular inspection is carried out to check the quality and speed of the construction.

Possession and occupation of building: during construction of building co - ordination with the developer shall be done to see that all the formalities for the occupation of the building are fulfilled and members get possession with the occupation certificate.

Preparation of feasibility report: a feasibility report shall be prepared by studying the plan, by applying the fsi & tdr rules, considering maximum benefits the member can demand from the developers, a report will be submitted by the society.

Preparation of tender for redevelopment: "tender" is a crucial document, which is to be designed meticulously to avoid any kind of misunderstanding/argument during the course of project. it shall contain an agreement, technical and financial specifications, general conditions and detailed specifications and only reputed builders are invited for the project bid.

Selection of developer: after detailed study of various bids, considering technical and commercial angle a bid comparison chart is prepared and after short-listing some developers for interview and negotiations and over mutually acceptable developer is finally selected to carry out proposed work.

Project planning: after placing of work order the developer is asked to prepare a detail work schedule and the entire project is planned with deadlines.

Verifications: in most of the projects the developer/builder shows some plans to the society and gets approved different plan; so afterwards society is left on the mercy of bmc officials. the project management consultant would verify the plans of building prepared by the developers for the society members in respect of planning, area calculations, legalization and authorization of the area allotted to the members. any alteration in the plans of society building prepared by builder should be to the satisfaction of society members.

Quality controls: a regular visit of a project manager is required at least 3-4 times a week. maximum emphasis is to be given on the quality of the constructions to avoid recurring expensive repairs afterwards. the project management consultant should supervise the quality of constructions and verify the structural plan, necessary instructions/specifications has to be issued to contractor as per the requirements of the structure to have long lasting durability.

Inspections: inspecting whether the work has been carried out as per approved plans and as per commitments made by the developer with the society and whether all the necessary approvals are obtained by builders at every stage of the works.

Project management consultancy services in brief:
 arranging soil testing of the site
 preparation of detailed brief for the preparation of concept proposals by the architect
 selection/appointment of the architect, structural consultant, electrical consultant, sanitary consultant and execution of agreement with them
 scrutiny of concept designs proposed by the architect and approval of the concept
 arranging the coloured perspectives of the concept scheme and arranging model
 preparing preliminary cost estimates for the total construction work
 review/approval of design work carried out by the architect and respective consultants.
 co-ordination of design work between different consultants
 monitoring the receipt of all the pre-construction nocs, clearances permissions, sanctions from corporation, storm water, sewerage, electrical, garden, civil aviation, ulc, road and traffic dept. etc
 finalizing the specifications for the different items of work
 arranging/co-ordination establishment of all temporary facilities at the project site
 preparation/review/finalization of bill of quantities for different items of work in respect of all the trades
 preparation/review/finalization of detailed tender documents for all the trades
 short listing / prequalifying the contractors for various trades
 invitation of tenders, scrutiny of bides, clarification to queries, making comparative statements, negotiations with bidders, evaluation of prices and finalizing the contract for all the trades.
 preparation of contract documents and execution of the same by the contractors
 preparing schedules of materials in respect of items proposed to be procured by the employer/supplied to the contractors
 managing procurement of the above stated materials, cement, steel, tiles and any other materials required to be issued to the contractors, including inviting quotations, negotiations, finalization of rate contracts, placement of purchase orders, inspection of materials and settling the bills of the suppliers.
 detailed supervision of contractors works at project site.
 co-ordination between different contractors
 monitoring/expediting the progress of contractors through project management techniques
 checking/certifying contractor's running and final bills and settlement of claims of the contractors
 preparation of progress reports
 arranging 'as built'/user manual drawings, of all the trades
 arranging all post construction approvals

Apart from the above, the project management consultants can also arrange and co-ordinate with financial and legal services which are equally important for a successful completion of any redevelopment project.

Financial services

 preparation of financial feasibility reports
 managing financing of the project from financial institutions
 handling books of accounts up to finalization including profit and loss a/c and balance sheet
 handling all accounting matters during the progress of redevelopment
 handling property and other taxation matters and filing of returns.
 budgetary controls
 ratio analysis
 preparation of cash flow statements

Legal services

 ascertaining correctness of land ownership records (title, p. r. card, etc) in the name of the present owner.
 to get the road setback areas and other reserved areas transferred in the name of local bodies, as per local laws.
 to arrange conversion of land usage as per local laws
 to get nocs, sanctions, approvals from heritage committee, as applicable
 to deal with transfer of development rights matters, as applicable

Non-destructive evaluation tests:

Non-destructive testing (ndt) are non-invasive techniques to determine the integrity of a material, component or structure or quantitatively measure some characteristic of an object.in contrast to destructive testing, ndt is an assessment without doing harm, stress or destroying the test object. the destruction of the test object usually makes destructive testing more costly and it is also inappropriate in many circumstances. ndt-ce, non-destructive testing in civil engineering plays a crucial role in ensuring cost effective operation, safety and reliability of reinforced concrete or pre-stressed concrete structures
Concrete strength assessment:

 rebound hammer test
 ultrasonic pulse velocity test
 core sampling & testing

Chemical tests:

 carbonation test
 chloride content
 corrosion potential assessment:
 cover meter survey
 half cell potential survey
 resistively measurements

Beware of manipulations

It has been often noticed that during the process of redevelopment, the terms of development agreements as agreed upon, are later twisted and grossly violated by the developers and the ground rules of mrtp and dcr by unlawful planning are flouted by constructing additional/unauthorized areas that are beyond the entitlement (i. e. beyond the plot fsi and the tdr/fsi loaded) for their hidden financial gains. the buyers of such unlawful flats/properties land themselves in deals that lead to litigation at a later date.

At times, upon the completion of the project, there are major inconsistencies and discriminatory features noticed in the approved plans v/s actual layouts, measurements and other aspects in respect of the constructions of residential area and the commercial area which may not be in conformity with the development agreement originally executed between the society and the developer.

It has also been observed that the deviation of vital rules and guidelines of mrtp/mcgm/dcr are conveniently overlooked by few corrupt and dishonest but “sympathetic officials” of mcgm and the final plans with numerous anomalies so submitted by the said developer are approved by them without verifying the justifiability or its conformity with the development agreement executed with the society.

Commencement certificate

Demolition of the building: once the members have shifted into their alternate accommodation, the demolition of the building will take place either all the wings simultaneously or phase wise depending upon the scheme of re-development. usually about three months are given to the members from the date of execution of the development agreement before asking them to shift to the alternate accommodation.
Obtaining the cc: the iod approval and demolition of the building will be followed by the issue of the cc (plinth level) by the mcgm which shall enable the developer to start the construction work and after the plinth lines are verified by the mcgm officers, the further cc is granted for the complete building

Duties and functions of the developer

The developer to demolish the building existing in the plot and construct new multi storied buildings taking into account the earthquake resistant factors as directed by the municipal corporation of greater mumbai. the new building should have stilt for car parking and should consist of _____ stories as per approved plans. the final plans are to be prepared after due consultation with the managing committee and understanding their requirements.

The developer shall be responsible to obtain all the necessary approvals from the municipal corporation of greater mumbai and all other statutory and government offices and departments which will include:

 development planning remark or town planning remark: mcgm (dev. dept. )
 survey of the entire plot with regards to the area and topography of the plot, existing plot boundary and existing structures (developer’s architect)
 intimation of disapproval (iod) : mcgm
 property tax assessment noc: mcgm (assessment department)
 hydraulic engineer no objection certificate: mcgm (hydraulic department)
 storm water drainage no objection certificate: mcgm
 sewerage no objection certificate: mcgm
 traffic dept. of municipal corporation of greater mumbai no objection certificate: mcgm
 urban land ceiling noc: competent authority in collector's office
 tree no objection certificate: mcgm (tree authority)
 non-agricultural permission: collector's office
 civil aviation no objection certificate: airport authority of india
 pest control no objection certificate: mcgm (pco)
 mtnl no objection certificate: mtnl
 chief fire officer's no objection certificate: fire department office
 commencement certificate: mcgm
 lift inspection no objection certificate: inspector of lifts, pw
 occupation certificate (oc) : mcgm
 water connection certificate under section 270a: mcgm
 drainage completion certificate: mcgm (water department)
 building completion certificate (bcc) : mcgm
 tdr loading: mcgm
 building demolition work: contractor appointed for demolition work
 soil testing report: the concerned laboratory

Please ensure to collect all the listed certificates from the developer/developer as the same must be with the custody of the housing society once the redevelopment of the property is completed and the occupancy certificate is issued by mcgm to re-house the members.

Building plans and agreements

Finalizing the plans with members: after due consultation with all the members, the plan will be made to suit the requirements of the existing members and will be approved by them before applying for sanction from mcgm. society must have architect to scrutinize and verify the building plans and municipal plans to safeguard society’s interests.

Agreement with the society: the execution of the development agreement will be done once the above two points have been cleared by both the parties and after the draft copy of the agreement have been approved by the solicitors of both the parties. it is possible to appoint a common solicitor so as to reduce the time in execution of the document

Guidelines as per sect.79 (a) of mcs act, 1960

Redevelopment of housing societies is usually burdened with bitterness and complaints of high-handedness and corruption against the managing committee. hence, with a view to ensure transparency in societies seeking to undertake redevelopment projects, the state co-operative department has, for the first time, issued guidelines for societies to follow under section 79 (a) of the maharashtra co-operatives act, 1960.

The guidelines are issued by a committee comprising the co-operatives commissioner and cidco chairman pursuant to a deep study of complaints by members of housing societies undertaking the redevelopment of their property. according to an important feature in the guidelines, a redevelopment scheme has to be approved by the general body only if three-fourths of the society members are present at the meeting.

The special general body has to approve the bid of the successful bidder in a meeting attended by the registrar. the entire proceedings have to be video-recorded. once the agreement is accepted in terms of area and corpus fund, it cannot be revised. the successful bidder has to give a bank guarantee equivalent to 20% of the total project cost to show his financial strength, and proof that he will not throw away the project midway.

The developer has to complete the redevelopment project in two years, or a maximum of three years. the development agreement must be signed on carpet-area basis. most importantly, if, for some reason, the successful developer is unable to complete the project, he cannot sell his agreement to another developer.

Indeminity bond in form m-20

Further, it is learnt that in many societies, the managing committees, who execute the documents with the developers, do not possess any knowledge of various laws governing the housing societies and hence, do not hold any legal holding in the managing committee as they have never filed/nor aware of filing the indemnity bond in form m-20 on a stamp paper required under section 73 (1ab) and rule 58a of the maharashtra cooperative societies act 1960.

The members who fail to execute such bonds within the specific period are deemed to have vacated his office as a member of the committee and no legal effects can be given to the documents executed by them with the developers.

Offer through tenders

Offer letter to the society: the housing society is required to appoint project management consultant / architect, prepare a tender with their help and advertise in 2 leading news papers inviting the sealed tenders from the developers and a redevelopment committee is formed to shortlist at least 3 developers on merits and the comparative data is placed before the spgm for final selection. the selected developer is informed accordingly and his terms are invited in writing as an offer letter to the society.

Selection of 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 organizing a wedding.

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.

Right to informaiton

Under right to information act, the housing society can procure all the plans and the related documentary evidences from mcgm duly attested by two senior engineers of the building proposals dept. to study the anomalies which exist in execution of the entire redevelopment project even after the occupancy certificate is issued.

Stages of approvals

Sanction from mcgm in favour of the society: after the execution of the development agreement, plans are put up for sanction from mcgm with regards to the entire layout as well as the concession plans in favour of two fsi (i. e. plot area + tdr purchased from open market). this step makes the society feel safe and confident towards the development.

Loading of tdr in favour of the society: on receipt of the plans from mcgm approving the loading of tdr, the developer will purchase the tdr from the open market in the name of the society and get the same deducted and loaded from mcgm. this step is taken with the intention of making the society feel secure about the entire development process.

Obtaining the iod: after the tdr is loaded, the iod is obtained from the mcgm and the developer then starts fulfilling all the conditions as mentioned in the iod before obtaining the commence certificate.

Society must certify above mentioned stages approved from their architects and ensure written approval before vacating the premises.

Occupation certificate infrastructure

Construction of the building: the building construction work will began in full earnest as per the approved plans by the mcgm taking into consideration the various safety factors to be considered during the construction work. the quality and the amenities will be provided as per agreed terms and conditions and duty of project management consultant to ensure the same.

Obtaining the oc: the last step before the construction work is termed as complete is obtaining the occupation certificate enabling the developer to allot the occupation to the old as well as the new member

Shifting the old members: on receipt of the occupancy certificate the developer can lawfully allow the possession of the flats to be taken over by their owners

Late possession of flats

Builders and developers play vital role in redevelopment of housing societies. currently, the redevelopment mania of residential properties is booming in full swing and one finds in mumbai that compound wall of every third property of a society is covered with tins as number of small time builders and real estate companies has joined the battle in an effort to grab a share of this fast rewarding pastry.
There is also likelihood of delay in completion of such projects followed by numerous complaints from the buyers when flats are not delivered in tine as documented. what do developers do when apartments are not finished on time? some pay back their clients as part of a penalty clause.

It is a long ending tussle between builders and home buyers that never seems to end delivering projects on time. there are umpteen cases where builders have taken extra time to finish projects while leaving home buyers to suffer fiscal setbacks.

The realty industry experts say that in the last few years, developers have taken up 10 times more projects compared to what they have done in their total lifetime. have they thought where the availability of the labour, brick, steel and cement is? how will they manage all this? however, there are well-known construction companies who are trying to get more advanced technology for construction to match their deliveries. however, the cost of adopting such technologies in india is still very high and not many developers are able to benefit from it.

In case of delay, as there has been a breach of contract, the builder would attract penalty under both consumer protection act and the maharashtra ownership flats act. the builders are careless about compensation because there is no detailed written down real estate regulator from the government as yet, for rigorous punishment to such builders. a consumer doesn’t want to get into a legal tangle and just wants his flat in hand and the unscrupulous builders take advantage of this helplessness.

The builder problems can’t justify the delay. the default on the part of the builder would attract penalty under both consumer protection act and the maharashtra ownership flats act, 1963. often, the builders have an agreement clause that assures buyers a daily damage for the delayed possession. the buyers must ensure that his agreement for purchase of flat includes the clause compensation from the builder for delay in possession.

If such compensation clause for delay in possession of flat is included as penalty clause in the agreement for purchase of flat entered between the buyer and the builder i. e. monetary compensation for per day's/per month’s delay, buyer can be sure to get the compensation.

Redevelopment rules & regulations

Stages of redevelopment

1. offer letter to the society
2. terms and conditions with the society
3. agreement with the society
4. sanction from mcgm in favour of the society
5. loading of tdr in the society’s name
6. obtaining the iod
7. shifting of the members
8. demolition of the building
9. obtaining the cc
10. construction of the new building
11. obtaining the oc
12. shifting the old members

Offer letter to the society: the housing society is required to advertise in 2 leading news papers inviting the sealed tenders from the developers and a redevelopment committee is formed to shortlist at least 3 developers on merits and the comparative data is placed before the spgm for final selection. the selected developer is informed accordingly and his terms are invited in writing as an offer letter to the society

Terms and conditions with the society: the first step towards the re-development is agreeing on the basic terms and conditions between the members and the developer. the broad terms and conditions will include extra area, corpus money, shifting charges, alternate accommodation, time of re-development, amenities in the new building, etc.

Finalizing the plans with members: after due consultation with all the members, the plan will be made to suit the requirements of the existing members and will be approved by them before applying for sanction from mcgm

Agreement with the society: the execution of the development agreement will be done once the above two points have been cleared by both the parties and after the draft copy of the agreement have been approved by the solicitors of both the parties. it is possible to appoint a common solicitor so as to reduce the time in execution of the document.

Sanction from mcgm in favour of the society: after the execution of the development agreement, plans are put up for sanction from mcgm with regards to the entire layout as well as the concession plans in favour of two fsi (i. e. plot area + tdr purchased from open market). this step makes the society feel safe and confident towards the develop

Loading of tdr in favour of the society: on receipt of the plans from mcgm approving the loading of tdr, the developer will purchase the tdr from the open market in the name of the society and get the same deducted and loaded from mcgm. this step is taken with the intention of making the society feel secure about the entire development process

Obtaining the iod: after the tdr is loaded, the iod is obtained from the mcgm and the developer then starts fulfilling all the conditions as mentioned in the iod before obtaining the commence certificate

Shifting of the members: the members will feel lot more confident after the iod is been obtained from the mcgm towards the entire development of two fsi. the members will now shift into their alternate accommodation as a pre-requisite before demolition of the building which is a must before obtaining the cc from mcgm
Demolition of the building: once the members have shifted into their alternate accommodation, the demolition of the building will take place either all the wings simultaneously or phase wise depending upon the scheme of re-development. usually about three months are given to the members from the date of execution of the development agreement before asking them to shift to the alternate accommodation
Obtaining the cc: the iod approval and demolition of the building will be followed by the issue of the cc (plinth level) by the mcgm which shall enable the developer to start the construction work and after the plinth lines are verified by the mcgm officers, the further cc is granted for the complete building

Construction of the building: the building construction work will began in full earnest as per the approved plans by the mcgm taking into consideration the various safety factors to be considered during the construction work. the quality and the amenities will be provided as per agreed terms and conditions

Obtaining the oc: the last step before the construction work is termed as complete is obtaining the occupation certificate enabling the developer to allot the occupation to the old as well as the new member

Shifting the old members: on receipt of the occupancy certificate the developer can lawfully allow the possession of the flats to be taken over by their owners

Duties and functions of the developer

1. the developer to demolish the building existing in the plot and construct new multi storied buildings taking into account the earthquake resistant factors as directed by the municipal corporation of greater mumbai. the new building should have stilt for car parking and should consist of _____ stories as per approved plans. the final plans are to be prepared after due consultation with the managing committee and understanding their requirements.
2. the developer shall be responsible to obtain all the necessary approvals from the municipal corporation of greater mumbai and all other statutory and government offices and departments which will include:
1. development planning remark or town planning remark: mcgm (dev. dept. )
2. survey of the entire plot with regards to the area and topography of the plot, existing plot boundary and existing structures (developer’s architect)
3. intimation of disapproval (iod) : mcgm
4. property tax assessment noc: mcgm (assessment department)
5. hydraulic engineer no objection certificate: mcgm (hydraulic department)
6. storm water drainage no objection certificate: mcgm
7. sewerage no objection certificate: mcgm
8. traffic dept. of municipal corporation of greater mumbai no objection certificate: mcgm
9. urban land ceiling noc: competent authority in collector's office
10. tree no objection certificate: mcgm (tree authority)
11. non-agricultural permission: collector's office
12. civil aviation no objection certificate: airport authority of india
13. pest control no objection certificate: mcgm (pco)
14. mtnl no objection certificate: mtnl
15. chief fire officer's no objection certificate: fire department office
16. commencement certificate: mcgm
17. lift inspection no objection certificate: inspector of lifts
18. occupation certificate (oc) : mcgm
19. water connection certificate under section 270a: mcgm
20. drainage completion certificate: mcgm (water department)
21. building completion certificate (bcc) : mcgm
22. tdr loading: mcgm
23. building demolition work: contractor appointed for demolition work
24. soil testing report: the concerned laboratory

Please ensure to collect all the listed certificates from the developer/developer as the same must be with the custody of the housing society once the redevelopment of the property is completed and the occupancy certificate is issued by mcgm to re-house the members.

3. the developer should provide the following infrastructure after the completion of the re-development work:
A. complete paving around the building finished with suitable materials
B. storm water drain
C. sewerage lines
D. security arrangements
E. garden and landscaping (wherever possible)
F. pipe gas line (as per availability)
G. internet facility (as per availability)
H. society office
I. adequate car parking spaces

The developer has to provide extra area over and above the existing carpet area to all the members free of cost in the newly constructed building. the flower bed as open balcony area should be provided as permitted by the municipal corporation of greater mumbai. (area will be approx sq. fts. )

4. the developer should pay the society/individual member, a corpus fund of rs…….. towards granting of development rights. the above amount is helpful in paying all outgoings of the existing members in the newly constructed flats. the corpus amount is worked out on the basis of rs…….. per sq. fts on the existing carpet area.

5. the developer should provide displacement compensation towards temporary alternate accommodation to the affected members during the construction work at the rate of rs…… per sq. fts on the existing carpet area. the compensation has to be paid from the time the vacant possession is given by the members for demolition till the construction of the new building/s is/are complete and the peaceful possession of the new flats given by the developer.

6. the society shall accept and admit the prospective/additional flat owners of the newly constructed building/s as members of the society and treat them at par with existing members.

7. the developer should prepare a tentative layout of the new building which has to be shown to the members as and when required.

8. the developer may tie up with leading financial institutions and banks and arrange for necessary approvals for housing loans for the existing members and prospective clients.

9. the developer should complete the entire re-development work within a period of ___ months or as agreed with the society after all the legal formalities and municipal approvals are obtained. the initial municipal approvals will take about three months depending upon the existing rules and regulations governing the re-development work.

Standard list of amemities

Structure: the structure would be designed as multi frame structure of rrc with provisions of earth quake resistance features.

Elevation and planning: exquisitely designed elevation features may be provided along with careful and detailed planning with plenty of light and ventilation in each rooms and minimum wastage space with proper co-ordination of all rooms. the building may be provided with sand faced plaster on the external face water proofing plaster and chicken mesh should be used as required

Entrance lobby: the entrance lobby may be elegantly designed with granite tile and pop false ceiling.

Doors: all the doors should be provided with marine flush doors and cp frame with cover mouldings. the main door must be provided with good quality night latch, safety chain, tower blot and attractive handle. internal doors may be provided by cylindrical mortise type locks.

Windows: all the windows of rooms and toilets should be provided with marbles frames with designed mouldings. heavy section powered aluminium sliding windows with 5 mm tinted glass may be provided with imported bearings and fittings.

Plaster of paris: beautifully designed cornice has to be provided in living room. walls of all the rooms to be finished with pop panning and grooves to be provided on top of the skirting

Electric work: all the electric wiring work must be done as per the norms of reliance energy using 1/18, 3/20, and 7/20 flexible wires with use of mcb and elcb for safety of the flat owners. latest available switches of reputed company must be provided.

Extensive electric layout comprising of the following points to be provided:
Spot lights (living room and bed room) , tube lights, fans, a. c. (living room and bed room) , geysers, exhaust fans, aqua guard, mixers, washing machine, refrigerator, t. v. cable, gas pipe line (if available) , refrigerator

Plumbing: all the plumbing pipes, fixtures and fittings should be strictly as per is norms. cp plumbing fixtures (ess ess or jaguar) should be provided in all toilets with matching sanitary ware of reputed company. plumbing points should comprise of wall mixtures, showers, taps, washing machines and aqua guard.

Flooring and tiling: marble or granite or granite flooring should be provided with matching skirting of 3”. toilets should have full dado height of coloured glaze tiles of reputed company of indian or imported make with designer borders and motifs.

Kitchen: granite kitchen platform comprising of cooking and serving platforms may be provided with moulded facia patti and vertical sides. stainless steel sink has to be provided.

Colour: the entire flat should be painted with synthetic enamel paint including doors and ceilings. the external walls of the buildings must be painted with good quality cement paint.

Lift: lift of otis/johnson make may be provided with all the safety features.

Terrace: the terrace should be finished with china chips and high parapet wall with corner lights and water points.

Compound wall and gates: new compound wall should be constructed with proper design and sufficient electric points.

The task of satisfactory completion of redevelopment of any housing society and to get back their members in their dream houses is not difficult provided the office bearers and the committee members are sincere and honest and justify their respective posts in the welfare and well being of the members of the society.

The author of this article is an experienced counsellor and senior analyst for redevelopment of housing societies with in-depth study of integral techniques with exclusively knowledge in the area of societies laws and redevelopment of housing societies in mumbai as also having many articles penned on internet on various parameters under following titles. just type the title in google search window and you will find the text of whole article published by many websites. please educate yourself and caution your friendly neighbours to be vigilant from irregularities and illegalities in redevelopment by the builders, illegal gratifications by builders to corrupt members of managing committees, rampant corruption in bmc, flagrant violation of rules and regulations by the builders, how to beware of cheat and fraud builders and their criminal and felonious act.

 planning for redevelopment? read this……guidelines on redevelopment of housing projects in mumbai
 format of indemnity bond in form m-20
 letter of consent for redevelopment of housing societies
 mismanagement by managing committees
 section 101 of maharashtra co-op. societies act 1960 for recovery of dues from defaulting members
 unhealthy and unlawful practice by certain developers in redevelopment of housing projects in mumbai
 importance of indemnity bond in form m-20 for managing committees
 code of conducts for developers: redevelopment of housing societies and old buildings in mumbai
 long live corruption in redevelopment of housing societies in mumbai
 guidelines for selection of a good builder
 busting of redevelopment projects of housing societies
 redevelopment of housing societies: cessed buildings in south mumbai: bonanza of fsi of 3.0 etc.
 code of conduct for builders developers
 compensation to be paid by the builder for delayed possession of flat
 corruption in redevelopment
 redevelopment and corrupt managing committee members
 redevelopment of housing societies and sand shortage
 redevelopment of housing societies: are govt. guidelines really persuasive and convincing?

Dilip shah
Counsellor and analyst for redevelopment of housing societies
[protected]@gmail.com
[protected]
[protected]

VERY IMPORTANT FOR REDEVELOPMENT OF HOUSING SOCIETIES: ARE GOVT. GUIDELINES REALLY PERSUASIVE AND CONVINCING?

With a view to ensure transparency in Societies seeking to undertake redevelopment projects, the Government of Maharashtra had issued a Circular bearing No. CHS 2007/CR554/14-C, Co-operation, Marketing and Textiles Department Date: 3rd January 2009 this contains a Directive under Section 79 (A) of Maharashtra Co-operative Societies Act 1960 for all the Co-operative Housing Societies in the State of Maharashtra regarding the Redevelopment of Buildings of Co-operative Housing Societies. These guidelines are applicable wherever the buildings of Co-operative Housing Societies in the State of Maharashtra are being redeveloped on a large scale.

It is implied that these guidelines are to be followed stringently before any step or idea of redevelopment is mooted by the Managing Committee amongst the members of the Society. In the following article, I have endeavoured to bring out certain vital but unnoticed areas of redevelopment aspects that have dejectedly escaped the attention of the Government while formulating these guidelines.

A new home in place of old is a dream that every resident member either tenanted or owner of the flat share. Wrecked buildings often on the threshold of collapse are a depressing reality for thousands of Housing Societies across Mumbai city and its suburbs. With structural strength already poorly affected and conditions deteriorating further with each passing day, week and month, sooner or later the stage arises when members start aggressively exploring the possibility of redevelopment as the only option for their properties rather than spending lakhs after cosmetic repairs and yet, the buildings remain as old as ever.

However, deciding and implementing a venture of changeover from an old dilapidated building to new and specious houses with stable structure is a Himalayan Task. With imperfect or ambiguous information creating friction among members with no knowledge and poor leadership of office bearers of the Societies lead to diffident situation at a later date or during the tenure of redevelopment project making it difficult to achieve the desired results.

The non-availability of conveyance from the old owners/Builders renders the Societies liable the entire process of redevelopment break down instantly. Identifying the right kind of Builder or Developer is another challenge. There are various reasons due to which the redevelopment of old buildings has become a common cause of serious concern for the thousands of Housing Societies across Mumbai. It is the calamitous need of the hour that those Societies standing on the threshold of redevelopment and want to ensure the successful completion of redevelopment task without any imperil; get genuine advice and educate themselves by the redevelopment experts and counsellors having both, the experience and expertise.

It is said that Co-operative Movement is a Socio-Economic and Moral Movement. It is to fulfil the Constitutional Goal of the community that it is encouraged by the Government. It is neither a profit making activity nor is it a device for building power politics. Its candid role cannot be forgotten or else it will lose its sanctity and reliability.

It should be ensured that any activity of redevelopment of Housing Society should not compromise the rights of members and must safeguard the existence of the Society. In case the dissenting members fail to abide by the resolutions passed at the meetings then it is not the Developer to use his power but the Managing Committee of the Society who has to initiate appropriate action against those dissenting members under the recourse of law.

In most of the redevelopment projects one world is always missing i.e. “Co-operation” by all members of the Society. Some members in minority disapprove the decision of redevelopment merely because they manage to survive as opposition. However, their opposition must be acknowledged if it is judiciously established that their disagreement to issue of redevelopment is due to non-transparency, criminal conspiracy, underhand dealings or undesired favouritism to the Developer by the Members of their Managing Committee, fraud or misrepresentation or due to some statutory prohibitions.

The rule of supremacy of majority in Society’s affairs should prevail in cases where proper process of redevelopment is followed up, emphasize is given to the cooperative nature of Society’s deal by discussing each and every aspect of redevelopment openly in General Body Meetings and considering the suggestions in its true spirit, transparency in negotiations with the Developer thereby maintaining an equivalence among members.

The Govt. Guidelines have clearly spelt the process of calling meeting for redevelopment and business of such meetings, process of selection of Developer, appointment of an authorized officer from Dy. Registrar’s office, deliberations on the terms of Development Agreement and so on. However, in light of various observations made, it is a matter of thought whether these Guidelines for redevelopment of Society buildings and its process need thorough reconsideration and revision by the Government.

There should be an absolute transparency and integrity from the Developer’s side in executing the Development agreement. In most of redevelopment projects, the Managing Committee passes the resolution in favour of a Developer and set out vital commercial terms of Development Agreement. The Managing Committee thereafter negotiates these terms with the Developer and signs the agreement on behalf of the Society. There are certain very crucial and imperative questions on the practice of incorporating these terms/clauses which silently, provide rights to the Developer in the property of the Society in the so called “Development Agreement”.

Very often, the clauses in the Development Agreement between the Society and the Builder/Developer are such that all rights of the Society in the land including the benefits attached to the same in the form of existing/future FSI etc. are surrendered to the Builder/Developer. Thus, the Society not only looses the existing structure and building completely but is divested of its right and title in the land itself. If all such arrangements are accepted at their face value, then, the existence of the Co-Operative Housing Society itself is threatened.

For example, in the Development Agreement, many times under the head of “Developer’s Area Entitlement” it is quoted that ‘save and except the flat areas agreed to be allotted to the members of the Society under this Development Agreement besides the Society’s areas and all additional premises/areas constructed, shall belong solely to the Developer including the increase in future FSI of the Society by virtue of its enhancement declared by the Government as a policy decision’.

Is it not giving away the “Rights in Property” rather than assigning only the “Development Rights”? Every Managing Committee needs to be prudent and cautious while negotiating the terms and principles that are governing the Development Agreement. The market practice of adding such clauses as giving away the absolute right and authority to consume future FSI in Development Agreement creates rights in the property itself in favour of Developer.

These are the deceptive trade tricks of the Developers to create their ownership rights over the property of the Society. The Managing Committee of every Society must ensure to protect the title of property which exclusively belongs to the Society and such wicked and manipulative clauses are not supposed to be entertained or contemplated while approving the draft of Development Agreement.

It must be remembered that in case of negotiating and agreeing to the terms of Development Agreement, the Developer has to act only as an agent of the Society, purchase TDR in Society’s name, obtain various permissions in Society’s name and enter into Society’s premises as a licensee for developing the property and lieu of these performances, he gets his profitable consideration by way of selling his designated portion in the redeveloped area proportionately available to him out of additional FSI.

The Developer’s assignment of redevelopment comes to an end the moment the Occupancy Certificate is issued by the competent authority and handed over to the Society. It is needless to mention that the Society always remains the owner of its entire property including the future enhancement in FSI.

It is very essential here to pronounce that the Government Guidelines issued vide its circular dated 3rd January, 2009 should have covered the aspects of TDR/FSI and other rights attached to the land and property of the Society. Going through the fine print of these guidelines indicate that several vital aspects are lost sight of and the rights of the members are not given serious consideration.

The Government directives do not deal with the aspect of TDR/FSI and other rights attached to the land and how they have to be dealt with. Therefore, in case the Society desires to assign the development rights in the property to the Developer by way of executing the Development Agreement then the nature of such rights should be adequately documented by the Government with a view not to allow the Developer s to encroach or establish their future claims in the property of any Society.

The Government guidelines should also emphasis strongly on the discussions are to be held at the General Body Meeting of the Society on all the agreed terms of Development Agreement between the Developer and Managing Committee as the present guidelines of the Government do not provide for approval of draft Development Agreement at General Body Meeting and hence in case Managing Committee innocently or without understanding its implications, creates such rights in Society’s property in favour of the Developer and then the entire Development Agreement becomes vulnerable to such clauses and is exposed to risks of ownership of Society’s property.

All the members of the Society must read the fine prints of the Development Agreement containing the vital terms and offer their thoughtful and solicitous comments and observations before getting the draft Development Agreement approved in the General Meeting as here is a question of handing over of their hard earned shelters to the Developer.

It is largely observed that the draft of Development Agreement is presented by the Developer to the Society, is always found “Developer Friendly Draft” which has to be restructured by the Society with in-depth study and ensure that all protections are available under the law and make it “Society Friendly Draft” to avoid any litigation at a later date.

Apart from maintaining the absolute transparency in Development Agreement, one of major impediments that contribute in redevelopment process is the allegation of discrimination among the members of the Society and underhand dealings including receiving illegal gratifications from the Developer s particularly by the Managing Committee. The allegations of underhand dealings if any should be probed thoroughly before execution of Development Agreement.

The conflict of supremacy of Society’s resolution and rule of majority V/s Individual interest in redevelopment may sometime be fatal. Merely because some members in minority disapprove of the decision cannot be the basis to negate the decision of the General Body. As per the present Government guidelines on redevelopment, the rule of supremacy of General body is unquestionable, yet the valid objections of minority should not be ruled out and there should be a mechanism where their objections are adequately and expeditiously resolved.

The issue of conflict between collective interest and individual interest should be clearly addressed in the Government guidelines as otherwise; the minority will always feel subjugated and dispirited in such redevelopment work and in all probability the pace of redevelopment will suffer.

The Government guidelines are silent over a crucial issue and that is in case the non-cooperating member does not vacate, the Society should be delegated with powers of getting the resolution passed against the non-cooperating member and expel him with at least ¾ majorities since getting the order against him for eviction through Cooperative Court is costly, tedious and time consuming.

The Developer cannot initiate process of evicting dissenting member under the shelter of Development Agreement as the agreement never establishes privity of contract with the individual member or a dissenting member and hence for getting peaceful possession of the Society’s property, the Society has to take appropriate action against the dissenting member. The Government guidelines do not provide any efficient mechanism to solve such hindrance and handover peaceful possession of Society’s property to Developer to carry out redevelopment.

At times, the perception of safety over vital issues affecting the redevelopment can itself be a key point of litigation by dissenting members. The penalty and termination clauses in a Development Agreement are not enough protection to Society members in case the construction does not proceed or for some reason is halted or stopped. Further, many times, a Development Agreement doesn’t provide for termination of the agreement since such clauses cause discomfort to a Developer and hence the only remedy left with the Society is to go for prolong litigation of termination of the agreement and/or wait for getting penalty for delay in handing over of new structure.

Under such circumstances, there is no certainty of getting the redeveloped houses within agreed time and the existence of the Society itself is in danger. The Government guidelines provide some more protections like time bound completion of redevelopment project, providing financial Bank Guarantee of 20% of the project cost and non transferability of the development rights etc.

Here, one more issue requires serious concern that as per the Government guidelines, if the Developer provides a financial Bank Guarantee of 20% of the project cost as security, what about the unsecured portion of remaining 80%? In case the Developer abandons the redevelopment project leaving the Housing Society high and dry, whether cashing of the financial Bank Guarantee of 20% of the project cost is sufficient to complete the project and re-house the existing members in new premises?

The Government guidelines are alarmingly deficient and lack in the matter of such lifetime security issue of individual member who surrenders his shelter to remain in main stream. The Housing Societies must ensure to demand financial Bank Guarantee of 100% of the construct cost of at least the total residential area to reconstruct the premises belong to their existing members.

Looking to the enormous need of redevelopment in the city, a regulatory body should be created to oversee effective execution of redevelopment projects and quick remedy of Society’s and member’s grievances. Further, the safety of Society in redevelopment process needs to be reconsidered in the Government guidelines.

To sum up, though the Government guidelines for redevelopment of Housing Societies has tried to thrust and maintain transparency by the Housing Societies in the process of redevelopment. However, apart from above mentioned issues raised, the following issues also need to be given due concern to incorporate in the revised guidelines as soon as possible to safe guard the corporate interest of Housing Societies for more efficient redevelopment:

a) After the finalization of draft tender form and in order to get competitive quotations from experienced, reputed and reliable Developers, the Society should publish an advertisement in at least three leading News Papers of the city and invite offers rather than Society’s members to be entitled to furnish information about the Developer known to them.

It is worth to mention here that in the name of redevelopment of old housing societies in Mumbai, the various authorities, in last few years have carpeted free ground to breed rampant corruption to benefit the private builders to sub serve their illegal and deceitful objectives to garner huge profit. This is most required of the Government to impede the members of Managing Committees to enjoy the sleep with the builders for few greens and thrust redevelopment idea on the innocent and gullible members.

The corrupt members of the Managing Committees also resort to arm twisting, harassment and threatening method to the flat owners into submission as per the builder’s orders. Scared by such hounding tactics, most society members accept and offer their consent towards the redevelopment of their society without any protest and prefer to go along with whatever the members of the whole Managing Committee decides.

It is well known fact that the illegal gratifications and lavish spending by a large cartel of unscrupulous Builders entice the members of the Managing Committees of Cooperative Societies and provoke them to turn against their own members of the Society in the matter of obtaining consent and force implementation of redevelopment.

b) Members should be allowed to cast their vote through one of their family member as proxy, since many of times they may not be able to remain present in the General Body meetings held to discuss important issues and pass the resolutions;

c) Formation of high profiled Credit Rating Agency consisting of Industry Experts exclusively under the control of Housing Ministry of Central Government for Registration and fixing the grades for the Developers since in redevelopment projects of Housing Societies and SRA projects, the existence of the Society itself is challenged and it may get trapped into the community of III tire Developers’ taller claims to bag the projects beyond their means and capacity;

d) Provide for mechanism for quick action and appointment of a new Developer in case of non performing Developer;

e) Provide for stern penalty measures including imprisonment and blacklisting of Developer in case he Developer fails to execute the project in time.

f) Suitable legal action to initiate and severe action against unauthorized constructions, selling of car parking basement area as commercial, violation of rules of DCR, MMRDA, MRTP and BMC.

It has been often noticed that during the process of redevelopment, the terms of Development Agreements as agreed upon, the unhealthy attempts with ulterior motives are made by the Developers to twist and grossly violate the rules of MRTP and DCR by unlawful planning and constructing additional/unauthorized areas that are beyond their entitlement (i.e. beyond the plot FSI and the TDR/FSI loaded) for their hidden financial gains. The buyers of such unlawful flats/properties land themselves in deals that lead to litigation at a later date.

The ill- observance of MRTP/MCGM/DCR rules and guidelines are overlooked by the sympathetic officials of the MCGM and the plans so submitted, are sanctioned without verifying the eligibility or its conformity with the Development Agreements.
The Projects are completed and the Occupancy Certificates are issued without the proper inspection neither carried out by the MCGM officials nor taking pains to verify whether the actual measurement of the constructed areas tally with the final plans submitted.

It is further noticed that upon the completion of the projects, these additional/unauthorized constructions are silently regularized at the last moment by executing the Supplemental Agreements with the Office Bearers of the Societies with green handshakes/offering them handsome rewards.

g) Provision for providing financial Bank Guarantee of 100% of the total construction cost of total project cost/cost of construction for residential FSI to re-house the existing members.

h) Clarification on the applicability of Government guidelines wholly or partly in cases where a Society has only passed a resolution for appointment of Developer prior to the implementation of guidelines i.e. 3rd January 2009 and further steps are pending for ongoing negotiation of commercial terms between the Housing Society and the Developer.

Dilip Shah
Counsellor and Analyst for Redevelopment of Housing Societies
[protected]@gmail.com
[protected]
[protected]