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January 2019

Self Redevelopment of CHS

By | Press

Self Redevelopment of CHS

Should your housing society opt for self-redevelopmaent?

For residents of many ageing housing societies, going for redevelopment of their society can be a harrowing proposition. Builders are notorious for making tall promises only to renege on them, leaving homeowners stranded. Fed up of being short-changed by builders, housing societies are increasingly going for self-redevelopment. Here, the residents keep builders out of the equation and instead appoint a contractor and project management consultant to help execute the project. The trend has gather steam in Mumbai where 750-odd societies have opted for self-redevelopment. Should your housing society consider it too?
Here’s all you need to know about Self Redevelopment of CHS (Co-operative Housing Societies):

 

Taking back control:

Builders find redevelopment projects attractive as there is a huge potential for profits from selling the extra inventory, left after allocating units to original members. The builder gets to pocket the entire gains from the saleable area. However, under a self-redevelopment project, any surplus accrued from the sale of inventory is entirely retained by the society, to be distributed equally among its members.

 

Needs a team effort:

Despite the potential benefits of the concept, experts point out that self-redevelopment is not an easy task, given the complexities involved. The permissions and clearances required, and delays in execution can be frustrating. “The entire society has to come together and plan ahead to ensure success of a self-redevelopment project,” says Goyal. “From getting the requisite approvals to getting the paper-work done and securing the no-objection certificates society members have to do it themselves and need to cooperate to get things done,” says Puri. With around 56 no-objection certificates required from local bodies, getting all the approvals is quite a task. Hiring a consultant to handle these aspects can be helpful to some extent, but will add to the cost of the project. Hiranandani also points out that residents should not make unreasonable demands, as they can stall the projects. “They need to be realistic about the various aspects of the project and not add demands as it moves ahead.”

 

Benefits of Self Redevelopment of CHS: 

  • All profits from saleable area go to the society, not the developer.
  • Extra carpet area of up to 50-60%, compared to 10-15% that builder’s offer.
  • Since amenities are decided by members, they are expected to be more utilitarian.
  • New members are selected by existing ones
  • All property rights remain with the society as no power of attorney needs to be executed in favour
  • No member of a society has to mortgage his/her fl at to the bank

Challenges to Self Redevelopment of CHS: 

  • Securing consent and cooperation of all members.
  • Getting clearances and permissions can be exhausting.
  • Limited funding options.
Self Redevelopment of CHS

Self Redvelopment for Old Societies

By | Press

Self-redevelopment: A new beginning for old societies

There are thousands of old societies across India that have been facing a host of challenges such as water leakage, cracks in beams and walls and fragile floors, among others. A number of these, which were built over three to four decades ago, are especially found in cities such as Mumbai and Delhi, and require immediate attention having basically crossed their lifespan.

This has led to a growing need for redevelopment. Redevelopment essentially is the process wherein a society seeks the aid of a real estate developer, who assumes the responsibility of razing the construction to ground and reconstructing a new building. In the process of reconstructing the building, more often than not, there will be an increase in the number of apartments or area of the same because of the additional FSI benefits provided by the government. The house owner stands to gain from this in the form of extra square feet space. The developer in turn reaps his profit by selling the increased area via the construction of additional residential and commercial space.

However, while this is an ideal scenario, redevelopment, despite being a popular method, has posed its fair share of challenges to residences due to the high level of dependency on the developer. Perhaps the greatest problem intrinsic to the idea of hiring a third party developer is of course a conflict of interests between the society and the developer, both of whom are looking to maximise their own gains. Then there’s the problem of a lack of transparency, which stems from the fact that many developers tend to keep their operations private, i.e. a secret, in order to protect themselves and their knowledge from competitors. The self-redevelopment model eliminates both these scenarios because the society is redeveloping itself and the developer is merely an agent as opposed to a partner.

With such unfortunate experiences faced by a lot of societies, most of them are sceptical about redevelopment and, thus, remain hesitant to adopt this approach. Fortunately, this is where the lesser known, but gradually evolving concept of self-redevelopment saves the day by curbing issues faced while involving developers.

As part of self-redevelopment, society members take onus of the process, right from the conception to the construction process by hiring architects, contractors and project management consultants, with zero dependency on an external developer. This trend has been gaining popularity amidst societies, especially in Mumbai where members have been seeking help from banks in the form of substantial loans for its execution. It is also gradually making its way into other cities across the country. The prime advantage of this model is that the society has control over the entire project, which leads to its assured completion.

The government has been extremely supportive of the concept as it launched the self-redevelopment scheme 2018 on January 9, 2018 wherein, to accelerate the self-redevelopment process, the Maharashtra Housing and Development Authority (MHADA) is giving a massive push by providing a single window system in order to secure the required permissions promptly.

The Mumbai District Central Cooperative Bank (MDCCB) has already sanctioned crores worth of loans so far to provide financial support to develop old housing colonies wherein society members can come ahead and take charge of the entire redevelopment process themselves.

However, being a DIY sort of a model that housing societies across the country are still familiarising themselves with, issues such as delays, funds’ mismanagement, changing plans, and keeping a tab of changing government norms among others are commonly faced by these societies. For this reason, a more holistic, risk-free and reliable approach is provided by companies that guide societies that are looking for self-redevelopment.

These organisations provide complete clarity of the process, encourage societies for the execution and handhold them through the entire process while managing the project via a systems approach. They ensure the arrangement of finances, oversee the adherence to norms including RERA and GST, looking after securing necessary permissions, and construction, among others. They make the whole process transparent and risk mitigated by taking complete onus and putting organised steps into place, to ensure an on-time handover of the house to the respective resident.

With years of expertise, a robust model in effect and a prompt and efficient team are committed to provide a new beginning to old societies, thereby bettering the life of their inhabitants.

(By Pranay Goyal, Managing Director of Wedevelopment)

Self Redevelopment for Old Societies
Free Consultation
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TROUBLESHOOTER

Every problem is unique, and requires an all-round perspective to arrive at the best-fit Solution
Being a leader in the Self-Redevelopment space brings its own sets of responsibilities, of creating the right path and helping others in moving in the right direction.
Troubleshooter, is an initiative by Wedevelopment to guide Societies who are willing to opt for self redevelopment or already have initiated the journey of Self Redevelopment but have hit a wall in the process.
It is a One to One Consulting platform for Co-operative Societies to get the right answers.

The above Consulting is for the following Category of Societies/Challenges:

The Team of TroubleShooters:
Wedevelopment along with the following Industry experts are coming together to help you:

The Cost:
This Consulting Session is FREE for the Societies registering before 10th July 2020.

Please note:
In order to organise the session with the right expert and value time of the session, Society is requested to send a note with the following info:

"If you have knowledge, let others light their candles in it" - Margaret Fuller

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