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.