With the actual property costs touching a brand new excessive, residents in outdated buildings at the moment are discovering that they’ve a chance to unlock immense worth from their property by providing it to a builder/developer for redevelopment. Builders, on their half, are additionally looking out for properties with unused improvement rights the place they’ll construct a brand new construction of some storeys increased and promote these further flats for a tidy revenue for them. Whereas it might sound like a typical ‘win-win’ scenario, the method of redevelopment is not as straightforward because it sounds. It comes with a algorithm, procedures and implications which it is advisable perceive.

It’s useless to say right here that the Redevelopment of housing societies is often burdened with bitterness and complaints of high-handedness and corruption towards the Managing Committee. Therefore, with a view to make sure transparency in societies searching for to undertake redevelopment tasks, the State Co-Operative Division has, for the primary time, issued pointers for societies to comply with below part 79 (A) of the Maharashtra Co-operatives act, 1960.
The current pointers are issued by a committee comprising the co-operatives commissioner and CIDCO chairman pursuant to a deep examine of complaints by members of Housing Societies enterprise the redevelopment of their property. Based on an essential characteristic within the pointers, a redevelopment scheme must be authorised by the final physique provided that three-fourths of the society members are current on the assembly.

The topic of redevelopment has assumed nice significance as a result of in Mumbai, majority of the buildings owned by the Co-Operative Housing Societies are fairly outdated and in a dilapidated state. In case of redevelopment of outdated buildings which have accomplished 30 years or are past repairs as licensed by the Govt. authorised architect on the premise of his “Structural Audit”.

The primary and the foremost step earlier than moving into for redevelopment could be a structural audit of the constructing. The structural audit report will decide whether or not the constructing ought to go in for redevelopment or for main repairs. Within the absence of the technical report it might not be legally permissible to go a decision within the basic physique assembly. Nevertheless, it’s a indisputable fact that many co-operative societies all of the sudden name for Normal Physique assembly and determine to go in for redevelopment within the absence of a structural audit report.

There are two essential issues in a Resident/Developer association. One is from the industrial angle and one other is from the technical angle. A Developer often assures a sure amount of money by the use of corpus, a further space or a mixture of each. He could give another lodging in your non permanent keep, foot your leases or provide you with a month-to-month compensation inside which you must discover your non permanent lodging.

Earlier than you negotiate with a Developer, it is advisable set up the market worth of the property you’ll obtain on completion of redevelopment. It is a higher method than quoting a random determine to the builder that may make them really feel short-changed or the excessive quantity would make the builder shy on the brand new venture.

The technical angle refers back to the completed good. Does it match the standard and phrases and situations assured by the builder? Actually, on the settlement stage itself, the society residents ought to appoint a lawyer to draft and finalize the settlement. It often takes a yr for a builder to persuade the society members and take an in-principle approval. The society members ought to make sure the well timed completion of the venture which is crucial element to be talked about within the settlement.

The primary events concerned within the any redevelopment venture are Society and Developer. Committee Members dealing on behalf of cooperative housing society are largely non-technical and are laymen.

Subsequently it is vitally essential that the drafting of the Tender / settlement is finished meticulously in order that there isn’t a probability of dispute and/or distinction between each the events. Glorious expertise and huge Authorized & Technical information is required to draft such an essential doc. It is rather essential to avail the providers of an expert, who’s legally in addition to technically certified and an individual who has the imaginative and prescient to anticipate future issues and necessities.
In any scheme of redevelopment, the first goal is to make sure assure of efficiency. Efficiency is principally within the space of well timed building, high quality management and adherence to guidelines, and laws.

One of the best ways to pick out the builder is to ask sealed tenders by a public discover and such tenders ought to have the essential eligibility standards talked about. This may carry in additional transparency in deciding on the developer. Transient particulars and benefits of the tendering course of are given beneath.

– Preparation of Tender Doc together with Technical, Industrial and Authorized situations, detailed Specs and supply and so forth
– Commercial in three native Information paper
- Promoting Tender paperwork
– Identification of Developer and analysis of presents and Advice
– Steerage in Negotiation
– Formation of appropriate settlement


– As commercial is given in three outstanding newspapers society will get good presents from reputed builders.
– As presents are invited in a sealed tender kind, there’s a extreme competitors among the many bidders.
– As all of the specs and phrases and situations are similar for all of the bidders, it turns into straightforward for comparability and analysis.
– Earnest Cash Deposit within the type of PAY ORDER payable to the society is taken from every bidder in order that undesirable or non events don’t bid for the work
– Mode of measurement of carpet space and one that will certify the identical is clearly outlined.
– Total redevelopment proposal to be executed in society’s title making it safer for society in case of any issues confronted by developer.
– Proper to vary and or take away developer stays with the society.
– As all the main points pertaining to industrial phrases akin to Financial institution Assure, non permanent lodging, value of further space and so forth is clearly outlined the possibilities of ambiguity and disputes are nearly non-existent.
– Detailed technical methodology of labor is specified by the tender doc below the pinnacle of technical specification.
– Fundamental charges are talked about within the tender doc enabling members to vary any specification for his or her particular person makes use of.
– Proper to test amendments of plans through the progress of labor is stored with the society.
– Materials for use is spelt out with model names to keep away from any confusion.
– As all of the objects are outlined clearly the possibilities of getting reasonable supply are wonderful.
– Penalties of delay are outlined in tender doc.
– Tender is a legally binding doc.
– Bye Regulation No 158 recommends want of tender doc for building of constructing.

After a correct feasibility report is submitted, the subsequent step within the means of Redevelopment of any society is crucial one, viz: Choice of the PERFECT DEVELOPER, who will meet all of the wants of the society, and on the similar time be financially secure, and having plenty of expertise of Redevelopment as a result of unrealistic presents can usually result in redevelopment tasks being stalled and go away residents in a repair.

That is achieved by the method of tendering, whereby the PROJECT MANAGEMENT CONSULTANT will float a young doc containing all of the Authorized, Technical, and Industrial & Different essential Phrases & Circumstances, whereby most security of the society members is ensured, as they’re parting with their life’s most useful possession…. their home, within the fingers of an ideal stranger.

Earlier than we comply with re-development plan, please learn rigorously, the procedural points are strictly adopted as per the Govt. pointers on the Conferences of the Society.

The Authorities of Maharashtra has issued a Round bearing No. CHS 2007/CR554/14-C, Co-operation, Advertising and Textiles Division Date: third January 2009 which comprises a Directive below Part 79(A) of Maharashtra Co-operative Societies Act 1960 for all of the Co-operative Housing Societies within the State of Maharashtra relating to the Redevelopment of Buildings of Co-operative Housing Societies that wherever, the buildings of Co-operative Housing Societies within the State of Maharashtra are being redeveloped on a big scale, numerous complaints had been acquired from members towards managements of Co-operative Societies during which redevelopment is happening. In respect of many of the Co-operative Housing societies, nature of complaints regarding redevelopment is as below:-

1. Not taking the members in confidence within the means of redevelopment.

2. There isn’t a transparency in tender course of.

three. Appointing contractors arbitrarily.

four. To work by violating provisions of Co-operative Act, Guidelines and Bye-Legal guidelines.

5. No orderliness within the work of Architect and Undertaking Advisor.

6. Not planning Redevelopment Undertaking Report.

7. Not adopting correct process in finalizing tenders.

Whereas there isn’t a concrete coverage in respect of all above factors of grievance and subsequently Co-operation Commissioner and Registrar, Co-operative Societies, Maharashtra State, Pune had appointed a Examine Group below the Chairmanship of Joint Registrar, Co-operative Societies (CIDCO) to check the complaints acquired at varied ranges and for consultations with all constituents working within the related fields. The mentioned Examine Group has expressed the opinion that it’s important to border laws for redevelopment of buildings of Co-operative Housing Societies after session with all of the constituents within the subject of Co-operative Housing.

Directive for Redevelopment of Constructing of Co-operative Housing Society

1. Requisition for convening Particular Normal Physique Assembly for Redevelopment of Society’s Constructing:-

Not much less that ¼ members of the Society the constructing of which is to be redeveloped ought to submit a requisition to Secretary on the Managing Committee elected as per provisions of Bye-Legal guidelines and lawfully fashioned together with their scheme and options for redevelopment of the Society’s constructing for convening Particular Normal Physique Assembly to finalize the coverage on redevelopment of the constructing.

2. Convening Particular Normal Physique Assembly:-

On receipt of an software as per Directive No. 1 above, Managing Committee ought to take a word thereof inside eight days and Secretary of the society ought to convene Normal Physique Assembly of all of the members of the society, Agenda of the Assembly ought to be furnished to every member 14 days previous to the day of assembly and acknowledgement thereof ought to be stored on document of the society.

Earlier than convening the mentioned assembly, Society ought to acquire listing of Architects / Undertaking Administration Consultants on the panel of Authorities / Native Authority and acquire quotations from minimal 5 skilled and knowledgeable individuals for making ready venture report for redevelopment work of the constructing and one knowledgeable individual from amongst them can be chosen within the Particular Normal Physique Assembly.

Following enterprise can be transacted within the mentioned Particular Normal Physique Assembly:-

1. To take preliminary choice by considering demand of the members for redevelopment of society’s constructing and options acquired in respect of the identical.

2. To pick out knowledgeable and skilled Architect / Undertaking Administration Advisor on the panel of the Authorities / Native Authority for work of redevelopment of the constructing and to finalize objects of labor to be executed by them and phrases and situations of labor.

three. To submit define of this system for redevelopment of the constructing.

three. To just accept written options from members regarding redevelopment of the constructing:-

Members of the Society can be entitled to submit in writing to the committee eight days previous to the assembly their reasonable scheme, Options and suggestions for redevelopment of the constructing within the title of skilled and knowledgeable Architect / Undertaking Administration Advisor recognized to them. Nevertheless, that Architect / Undertaking Administration Advisor ought to submit a letter that he’s desirous of doing work of redevelopment.

four. Choices to be taken within the Particular Normal Physique Assembly:-

Quorum for the Particular Normal Physique Assembly convened for redevelopment of constructing of the Co-operative Housing Society can be ¾ of the entire members of the society. If quorum isn’t fashioned, assembly can be adjourned for eight days and if there isn’t a quorum for the adjourned assembly, it is going to be deemed that members are usually not interested by redevelopment of the constructing and assembly can be cancelled.

On formation of quorum for the assembly, Options, suggestions and objections from all of the members with regard to redevelopment of the society’s constructing can be considered and opinions expressed by all of the members can be recorded within the minutes e-book with names of involved members. Subsequently a preliminary choice can be taken whether or not to redevelop society’s constructing or not. Such choice should be taken with majority vote of greater than ¾ of the members. On preliminary decision about doing the work of redevelopment getting handed, following enterprise can be transacted within the assembly.

a) To chose knowledgeable and skilled Architect / Undertaking Administration Advisor

from the panel of the Authorities / Native Authority for work of redevelopment of the constructing and to finalize objects of labor to be executed by them and phrases and situations for a similar.

b) To submit a top level view of this system for redevelopment of constructing.

5. Offering minutes of Assembly to all members:-

Secretary of the Society ought to put together minutes of Particular Normal Physique Assembly as above inside ten days and a replica thereof ought to be furnished to all members and acknowledgement subsequently be stored on document of the society. Additionally one copy ought to be forwarded to the workplace of the Registrar.

6. Issuing Appointment Letter to the Architect / Undertaking Administration Advisor:-

Secretary of the society will inside 15 days of the assembly subject Appointment Letter to the Architect / Undertaking Administration Advisor chosen in Particular Normal Physique Assembly and Society will enter into an settlement with Architect / Undertaking Administration Advisor incorporating therein phrases and situations authorised in Particular Normal Physique Assembly.

7. Work to be executed within the preliminary stage by Architect / Undertaking administration marketing consultant:-

a) To survey Society’s constructing and land.

b) To acquire details about conveyance of land to the society.

c) To consider prevailing coverage of the Authorities and the laws relevant infrequently relying on possession of the land (MHADA/SRA/Municipal Company) and to acquire details about FSI and TDR, which might be accessible in relation to constructing and land of the society.

d) To consider options and suggestions from the members for redevelopment of the constructing as additionally the residential space to be made accessible to the members, industrial space, vacant space, backyard, parking, constructing specs and so forth. and to arrange a practical venture report.

e) Architect / Undertaking Administration Advisor ought to put together the venture report inside two months of date of his appointment and to submit the identical to committee of the society.

eight. Motion to be taken on receipt of redevelopment Undertaking Report:-

a) On receipt of Redevelopment Undertaking Report as above, Secretary of the society will convene a joint assembly to approve the Undertaking Report with majority vote by considering options acquired from Committee Members and Architect / Undertaking Administration Advisor. Discover in that behalf can be revealed on the Discover Board of the Society mentioning time venue and so forth. of the assembly.

b) It ought to be talked about within the discover that a copy of the Undertaking Report is offered within the society’s workplace for members to see and the discover ought to be served on all of the members that they need to submit their options eight days previous to the subsequent Committee Assembly and acknowledgement of such discover ought to be stored on document of the Society.

c) Seven days previous to joint assembly, options acquired from the members can be forwarded by Society’s Secretary to the Architect / Undertaking Administration Advisor for his Data.

d) There can be an in depth dialogue within the Joint assembly on the options / suggestions from members and opinion thereon of the Architect / Undertaking Administration Advisor and venture report can be authorised with vital adjustments. Thereafter draft of tender from can be ready and date of subsequent joint assembly can be mounted for dialogue on draft tender kind and finalizing the identical.

e) Whereas making ready draft tender kind, in an effort to get aggressive quotations from famend consultants and skilled Developer, both carpet space or corpus fund mounted (to not be modified) and by finalizing different technical issues, the Architect / Undertaking Administration Advisor will invite tenders. Society’s members can be entitled to furnish details about it to the reputed and skilled Developer recognized to them.

9. Making ready Record of Bids Acquired:-

a) On the Final day for receiving quotations, Secretary of the Society will put together an inventory of presents acquired and show the identical on the discover board of the society.

After 15 days of the final day for receiving quotations, Secretary of the society will convene particular assembly of Managing Committee of the society. Licensed representatives of bidders and members of the society desirous of remaining current can stay current for the assembly as observers.

Tenders so acquired can be opened within the presence of all and the Architect / Undertaking administration marketing consultant will scrutinize all tenders and put together a comparative chart and after checking benefit, status, expertise and comparative charge and so forth. and choose minimal 5 bids and if the bids acquired are lower than 5, all of the bids for placing up earlier than Particular Normal Assembly and anxious bidders can be knowledgeable about it instantly.

10. Choice of Developer:-

a) Workplace of the Registrar to nominate Licensed officer for attending Normal Physique Assembly:-

An software with listing of the members ought to be despatched inside eight days to the registrar for appointment of Licensed officer to attend the Particular Normal Assembly of the Society for choosing a Developer out of these chosen by committee of the Society with the assistance of the marketing consultant, by considering his expertise, benefit, monetary capability, technical capability and aggressive charge and so forth.

b) Convening Particular Normal Physique Assembly for finalizing tender:-

After appointment of licensed officer, along with his prior permission Secretary of the Society will repair the time and venue convene Particular Normal Physique Assembly for appointment of Developer and Agenda of this assembly can be despatched to all of the members 14 days previous to the assembly by hand supply and by registered submit and hold acknowledgement thereof on document of the Society. Additionally, workplace of the Registrar will make association to maintain his licensed consultant current for the assembly.

Additionally association can be made for video capturing of the assembly at the price of the Society. Any individual apart from formal members won’t be entitled to attend this assembly. Subsequently members can be required to current on the venue of the assembly with their Identification Playing cards. On the time of submitting redevelopment proposal to the involved authority for sanctioning, number of Developer and different work ought to have been executed within the presence of licensed officer from Registrar’s workplace.

c) If there isn’t a quorum for Particular Normal Physique Assembly:-

If the quorum of ¾ members out of whole members isn’t fashioned for Particular Normal Physique Assembly, the assembly can be adjourned for eight days. If quorum doesn’t get fashioned for adjourned assembly, it is going to be deemed that the members have no real interest in redevelopment of the constructing and the assembly can be cancelled and thereafter the mentioned topic won’t be taken up earlier than the Particular Normal Physique Assembly for approval.

d) Within the Particular Normal Physique Assembly to be convened for number of Developer, licensed consultant from the workplace of the Registrar can be current and observe proceedings of the assembly. Additionally, on involved representatives and licensed officer remaining current on the venue and on the time of assembly and on quorum of ¾ members getting fashioned, following enterprise can be transacted within the assembly.

i) Offering comparative data in respect of tenders chosen for presentation (for redevelopment work).

ii) Presentation by bidders one after the other.

iii) To pick out Developer for redevelopment of the constructing, to finalize phrases and situations and finalize the tender.

iv) To acquire consent from the chosen Developer.

v) Give details about additional work. It will likely be important to take written approval by ¾ majority vote of the members current for the assembly for number of Developer. If the chosen Developer of his consultant doesn’t stay current for the assembly, additional motion can be taken by presuming that they’ve given their consent for the venture.

11. Settlement to be entered into with Developer:-

Topic to the phrases and situations authorised by Normal Physique Assembly of the Society, an settlement ought to be entered into with the Developer inside one month below steering from the Architect / Undertaking Administration Advisor. Together with the factors advised by the Architect / Undertaking Administration Advisor appointed by the Society, following factors can even be included within the settlement.

(1) The interval for finishing redevelopment venture of the Society won’t exceed greater than two years and in distinctive instances, it won’t exceed three years.

(2) Developer will give a Financial institution Assure for quantity equal to 20% of the venture value.

(three) In the course of the interval of redevelopment, the Developer will make accessible to the members various lodging in the identical space so far as attainable or prepare to pay month-to-month lease and deposit as acceptable to members or make accessible transit camp lodging.

(four) The mentioned settlement can be registered below Registration Act, 1908.

(5) On completion of redevelopment venture, new members can be admitted within the Society solely with approval of Normal Physique Assembly of the Society.

(6) Carpet space to be allotted ought to be clearly talked about within the settlement.

(7) Growth proper vested within the Developer can be non-transferable.

(eight) Members will vacate their respective premises solely in spite of everything authorized approvals are acquired for redevelopment of the constructing.

(9) Rights of those that are in possession of the flats will stay unaffected.

(10) If any dispute arises within the work of redevelopment, provision ought to be made within the settlement to resolve the identical as per provisions of Part 91 of the Act.

(11) After receipt of Occupation Certificates, flats within the redeveloped constructing ought to so far as attainable be allotted as per current situations floor-wise and if it turns into essential to allot flats by drawing heaps, on completion of building, Developer ought to make association drawing heaps, and at the moment flats ought to be allotted within the presence of Registrar’s consultant and this course of be recorded by video capturing.

(12) Any Committee member or Workplace Bearer of the Society shouldn’t be the Developer or relative of the Developer.

(13) Constructing plans sanctioned by the Municipal Company / Competent Authority ought to be put up earlier than the Normal Physique Assembly for data and if any member desires copies of authorised paperwork, he ought to submit software for a similar to the Society and it is going to be binding on the Committee to furnish the knowledge by charging vital payment.

By order and within the title of the Governor of Maharashtra (Dr. Sudhirkumar Goyal) Principal Secretary (Co-operation and Advertising)

Copy to:

1) Co-operation Commissioner and Registrar, Co-operative Societies, Maharashtra State, Pune.

2) Divisional Joint Registrars, Co-operative Societies (All).

three) District Deputy Registrars, Co-operative Societies (All).

Choose File (14-C).

Ref.: Z:\000 – 500\2 GOVERNMENT CIRCULARS & COURT JUDGEMENTS 2008\2 GOVT CIRCULARS 2007\142 Directive for Redevelopment of Constructing of Co-operative Housing Society [English] 03-01-2009.

A effectively drafted consent of at the least 70% the Society members should be obtained in writing through the Society conferences when the topic of redevelopment is mentioned. Nevertheless, the minority members of co-operative housing society can’t hinder a redevelopment venture. On Jun 28, 2010, the Bombay excessive courtroom has as soon as once more dominated that members of a co-operative housing society who’re in minority can’t hinder a redevelopment venture and should abide by the bulk choice of the society, until they present that right here is a few prejudice precipitated to them or a fraud has been dedicated.

In a current ruling, the Bombay Excessive Courtroom has said that the problem of minority of tenants can’t be an impediment for redeveloping a property if minimal 70% of the tenants are prepared for a similar.

The judgment got here towards a matter of a redevelopment in Dadar the place 17 members had been opposing the redevelopment of an outdated Parsi chawl. Based mostly on the writ petition filed by the group of dissenting members, Justice D.B.Bhosale granted the permission to BMC to forcibly evict the households with the police assist in case of any opposition from the others towards the redevelopment.

You will need to word that as per the part 103B of Maharashtra Housing and Space Growth Act, 1976, with the rules for redevelopment of outdated Municipal Properties by the Municipal Tenants Co-Operative Housing Societies on the land owned by the Company below regulation 33(7) of the Growth Central Rules for Better Bombay, 1991, it’s vital that greater than 70% of the eligible present Municipal tenants ought to give written consent to redevelop the property below the scheme with a formation of a co- operative society / affiliation and an initiative proposal for the redevelopment.

The courtroom has held that after 70% or extra occupants /tenants give their consent for redevelopment by forming a co-operative physique and if the scheme is authorised by the company, it’s binding to all different occupants. As per the rules, the tenants / occupants with separate stand, don’t have any selection however to comply with the norms. Being in minority (about 30% or lower than that) the one selection for them stays is, to surrender their tenancy rights and give up from the scheme.

The particular basic physique has to approve the bid of the profitable bidder in a gathering attended by the registrar. The whole proceedings need to be video-recorded. As soon as the settlement is accepted by way of space and corpus fund, it can’t be revised. The profitable bidder has to provide a financial institution assure equal to 20% of the entire venture value to point out his monetary power, and proof that he won’t throw away the venture halfway.

The Developer values the sort of Societies that both have some open plot of land or are keen to demolish the outdated buildings to reconstruct new buildings. The place such redevelopment is feasible, Developer usually comply with pay some consideration by the use of Corpus Fund together with extra space of their present flats to the members and search permission to assemble a constructing on the open plot of land or to assemble a brand new, greater constructing utilizing the Transferable Growth Proper (TDR), Ground area index (FSI) after demolishing the present construction.

Relying upon the supply from the Developer and subsequent negotiations him, he both offers alternate residential flats to the members of the Society or pay lease prematurely by the use of submit dated cheques, one month lease as brokerage and transportation cost and so forth. to safe an alternate lodging until the brand new constructing is constructed and the members are rehabilitated of their new flats. All of the calls for and negotiations need to be rigorously recorded within the ‘Growth Settlement’ for profitable execution of redevelopment in a housing society and the workplace bearers and the managing committee members have a robust position to play.

In any means of redevelopment, one should pay attention to varied documentations which can be required and in addition one should perceive the tax implications on redevelopment of immovable property. The principal paperwork are ‘Growth Settlement’ and ‘Energy of Legal professional’ that are to be registered by paying applicable stamp obligation.

By executing the Growth Settlement’ with the Society, the Developer will get the required permission to develop the land and submits the papers to involved civic authorities. Upon varied sanctions accessible to him, the Developer constructs the buildings at his value, retains some flats for him to be offered within the open market and earn revenue.

It will be significant for a Society to have a legitimate conveyance of land and constructing in its favor for it to be redeveloped at a later date and that features buying marketable title, permission for reconstruction and building of further flooring by use of TDR and FSI, or else, Society could not get any approval of plan from Municipal Company. However attributable to our ignorance, majority of Builders fail to convey the title to a Co-Operative Society after the flats initially constructed on a plot of land.

Actually, the higher majority of the Co-Operative Housing Societies, fashioned in Mumbai within the final twenty years, don’t have the land conveyed of their favor which ends up in the Developer or the sooner proprietor continues to stay the proprietor of the property. This leads to a scenario the place these Societies have solely possessor rights and never the possession rights over the land, depriving them of the extra TDR FSI that’s the most important driving drive for coming into into such redevelopment agreements when required at a later date.

The duty of passable completion of redevelopment of any Housing Society and to get again their members of their dream homes isn’t tough supplied the Workplace Bearers and the Committee Members are sincere and justify their respective posts within the welfare and effectively being of the members of the Society.