Self-Redevelopment or Developers

By May 9, 2019Press

Successful redevelopment model for housing societies

 

Mumbai receives over 25,000 new migrants daily creating stress on residential spaces. Limited land parcels, ever increasing cost of land and are other rudimentary issue. In addition to this the sorry state of buildings constructed more than half a century ago is not only ruining the city’s façade but also putting the residents of such structures under risk. In the new Development Control and Promotion Regulations (DCPR-2034), the Maharashtra government has offered added FSI of up to 70% of the total existing build-up area if more than five tenanted building plots are amalgamated for joint redevelopment. This will ensure that the existing occupants of such buildings get up to 12% additional carpet area in their new flats. This has encouraged residents of older and weaker buildings to opt for redevelopment. Also, the attraction of having modern amenities and better homes is an added bonus.

Models of Redevelopment

Engaging a Developer

The housing society developers and negotiate the area and/or money to be delivered to specific residents in lieu of their space, the added amenities to be provided and the extra FSI that the developer can sell at market rate. . The selected developer undertakes the project with the promise of delivering a better structure with the desired amenities. However, there are umpteen instances where due to paucity of fund, improper planning or delay in approvals, buildings after buildings are lying un-finished, vacant with no light at the end of the tunnel.

The only solution to this is to be extremely cautious of the developer’s track record in the redevelopment space. The primary requisite here is clear communication, and a common consensus amongst all members of the society, and the developer.

“When a society chooses to go for the services of a developer the most important factor to look at is the track record and experience of the developer. One should specifically focus on these two things. The developer deliverability record as well as the quality of the delivered project is important. The past experience of the developer is of paramount importance.” informs Chandresh Mehta, Director Rustomjee.

 

 

Self-redevelopment

The government of Maharashtra in order to allow cooperative housing societies to undertake redevelopment of their building themselves has launched the self-redevelopment scheme in January, 2018. Under this scheme, the MHADA is required to provide a single window system, for all the necessary permissions required for self-redevelopment of the housing society. As also create a panel of architects, project management consultants and contractors, to provide choices to the housing society, to select the requisite professionals needed for self-redevelopment. The Mumbai District Central Cooperative Bank (the Bank) will provide the loan for self-redevelopment of the buildings of the housing society. Even though a robust model, self- redevelopment is new to India. Therefore, it is crucial for societies to exercise due diligence by getting an experienced consultant on board before commencing with the process. An example is the Saidham society (building No. 149) at Pantnagar in suburban Ghatkopar that secured 80 per cent approval of works from MHADA and the BMC last year. Shripad Mordekar, Saidham society’s Secretary said, “Our building is 52 years’ old and has 32 members. We have got an offer letter from the MHADA for re-development and will submit it to the BMC soon. After re-development, each house owner would get a 1,000 sq ft flat against the present 220 sq ft. Some builders were offering 484 sq ft flats to the society members, but after self-redevelopment each one of us would get a bigger flat.

 

Redevelopment Consultants

As redevelopment of a building involves dealing with large sums of money and awarding contracts to various people, housing societies are posed with a number of issues that include the mismanagement of funds, delay in operations, and more importantly, the dynamic regulations of the government that are hard to keep up with, on several occasions.

 

Self-redevelopment or Developers

 

Pranay Goyal, Founder, Wedevelopment, articulates, “As a transparent, holistic and risk-mitigated approach, selfredevelopment has made its way to become the future of the real estate sector. This holds particularly true in the case of metros, where majority land has already been consumed, leaving no free land available for developers. A consultant takes a holistic approach and guides societies throughout, making the self-redevelopment process risk mitigated and reliable.

Self-redevelopment requires society residents’ active involvement throughout the execution of the project, until its completion, especially in activities ranging from securing required approvals from concerned authorities to getting necessary no-objection certificates, and having all the paperwork in place, as the entire onus of the project lies with them. Goyal emphasizing the role of consultants states that they provide complete clarity to societies and practically handhold them through each step of the execution via a systematic approach while complying with changing government norms such like RERA, GST, and more, and securing essential permissions, among others. “By making the entire process transparent and organized, consultants also aim to ensure on-time handovers to residents.” Mehta, on the other hand, contends that when it comes to real estate every single person has an opinion and everybody thinks they can do a better job than the developer. “If it is a standalone development it might be a possibility. But that sort of development does not add much value to the quality of living. Redevelopment is a once in a lifetime occurrence and to let that flitter away by constructing a sub-par standalone building is a lost opportunity. One should always have a vision of a bigger canvas.

Original article