Once the decision has been taken by the General body to go ahead with the Redevelopment process, the first step that should be taken to expedite the process is to appoint a separate sub-committee whose sole purpose is to coordinate and expedite the process of Redevelopment. Many a times, the key Managing Committee members are senior citizens or are not in a position to devote additional time for such a major task. Therefore forming a Redevelopment sub-committee of younger and technical persons who are able to devote time for Redevelopment process, under the guidance of the Managing Committee will greatly help the process of Redevelopment.

As per the directive 79A of the Maharashtra Cooperative Societies Act, 1960, it is now mandatory to appoint an Architect / Project Management Consultant for guiding the members in the process of Redevelopment. Appointment of a good PMC is extremely crucial for the success of the Redevelopment process as this one agency becomes a nodal point of communication and plays a very vital role. Many Societies make the fatal error of going ahead with a PMC simply based on the lower fees quoted by them. This is a mistake that one will surely regret. It is important to select the PMC based on their Integrity and experience in dealing with other projects. Committee members should ideally visit other projects done by them and meet the committee members of such Societies to get first hand feedback before appointing any PMC.

The scope of work of a PMC can be as below:

1. PRE - TENDER STAGE

- Preparing a feasibility report based on the current FSI norms that gives a rough idea as to what kind of an offer should be expected from Developers.

- Organising to get surveyors to survey the Society plot and members existing flats and confirm the same.

- Organising to get the DP and TP sheet, the CS plans, etc. (These are basic documents that will be required before finalizing the Tender for redevelopment.

2. TENDERING STAGE

- To guide members in finalizing the list of amenities for the project.

- Prepare detailed technical specifications and special requirements of the particular project and take the concurrence of the Redevelopment Committee on the same. Based on these aspects, prepare a draft of the Tender documents and finalise the same after discussions with the Committee.

- Invite various Developers on behalf of the Society to collect the Tenders by email or through paper advertisement and to accept the Tenders duly filled by the Developers.

- Open the tenders in front of the General Body of the Society on the appointed date and time and explain to them the finer aspects of the offers received.

- Ask for details of various missing or unclear aspects from the Developers based on the documents submitted by them.

- Prepare a detailed report giving a comparative chart of the various offers received from the Developers.

- Guiding the Committee on the finer aspects of these details and give their recommendations.

- Helping the Committee in negotiations with various Developers by giving technical inputs.

3. POST-DEVELOPER SELECTION STAGE

- Highlighting the key technical points that have been finalized with the selected Developer and forward the same to the Lawyers for incorporating them in the Development Agreement.

- To guide the Society on matters pertaining to planning of the proposed building based on the plans offered by the Developer.

- To certify that the plans submitted by the Developer are the ones that have been finalized by the Society and that all aspects have been covered in the submitted plans.

- Certifying the areas of each of the member flats.

- To check the TDR documents, the details of the premiums paid by the Developer and ensuring the final approved drawings as well as IOD and other NOCs received by the Developers are in order. Certifying the same to the Society so that vacant possession can be given to the Developers.

4. CONSTRUCTION STAGE

- To monitor the safety aspects while carrying out demolition of the existing building.

- To put up full time Engineer / Supervisor with a good experience in construction to monitor the quality aspects as well as the pace of construction.

- To conduct a periodical review meeting with the contractors and the project team as well as the Developer’s representative to ensure that work is progressing smoothly and in case of some difficulties, to take corrective action as required.

- To have a periodical meeting with the Redevelopment Committee to brief them about the quality and progress of the construction.

- To inform the Committee in advance if any decisions are required from their side and to convey the decisions to the Developers in time so that the progress of work is not affected.

- To check the various finishing items like marbles, granites, tiles, Doors, Windows, Electrical and Plumbing items, CP & Sanitary fittings, Passenger and Car lifts, etc. during the course of construction and to advise the Committee if there is any variation with respect to the list of amenities mentioned in the Development Agreement.

5. POSSESSION STAGE

- To chalk out a detailed handing over - taking over strategy in conjunction with the Developers and the Committee to ensure that the process is smooth and there are no last moment hiccups resulting in wastage of time.

- To measure the size of all the member’s flats and to certify if they are as per the required size.

- To prepare a detailed check list of each of the member’s flats indicating what corrective steps need to be taken before possession can be accepted. To take the Committee’s approval on the same and to handover the list to the Developer’s representatives at site.

- To ensure that all the points mentioned in the check list are duly attended and resolved before possession is taken.

- To ensure that the Developers prepare a detailed handing over kit for the Society by which all the as-built drawings and the important documents are handed over.

The first and foremost task for the Redevelopment Committee to move ahead would be to get the Title as well as other key documents of the Society in order. The following key documentation needs to be looked into:

1. CONVEYANCE
It is essential for the Society to have the conveyance deed by means of which it derives the land rights. The first task should be to locate the original Conveyance deed and get it attested. In case, the Society does not have Conveyance of the land in its favour, then it is necessary to either approach the original Developer or owner in whose name the conveyance vests and convince him/her to part with the conveyance or to go for what is known as a deemed conveyance procedure. There are specialist consultants who advice Societies and get the deemed conveyance done and it is best to use services of such a consultant. Deemed Conveyance procedure may take anywhere between 4 to 6 months.

2. PROPERTY CARD (P. R. CARD)
The P.R. Card gives the details of the Plot i.e. the Plot size and in whose name the land vests in the Government’s Revenue records. It is necessary that the P. R. Card is in the name of the Society. In many cases, the Society has the conveyance of the plot in their favour, but the due process of transfer of land is not followed up with the Collector’s office and therefore the P. R. Card may stand in the name of the previous owner. If so, then it may be prudent to appoint a consultant/liason person to follow up with the Collector’s office and get the P. R. Card updated in the name of the Society. In case the Society doesn’t have conveyance of the land in its favour, the P. R. Card updation process will have to be done after deemed conveyance is done in favour of the Society.

3. D.P. REMARKS
The PMC shall be able to help you procure the D. P. Remarks, which are now available online on payment of a nominal fee. This is basically a document that mentions the zoning of the Plot as per the current Development Plan, wherein it will indicate whether the Plot is in Residential zone and whether it is affected by CRZ or any other reservations, etc.

4. T. P. REMARKS
Certain locations in Mumbai come under the ambit of Town Planning Schemes. The PMC will be able to guide you whether your plot is under Town Planning Scheme. If it is, you will also need to get the T. P. Remarks. This will give you the size of the land and its plan finalized by the Town Planning department. Sometimes, the area mentioned in the T.P. Remarks is lesser that the P. R. Card and in such cases, the lesser of the two areas will be applied by the Corporation for calculating the FSI that can be available on your plot.

5. SOCIETY RECORDS
It is important that all the past records of the Society like Minutes of meetings, IT returns, etc are properly compiled and also updated with the Registrar of Societies. In many Societies, these aspects are ignored but when it comes to Redevelopment, it is important that all these documents are properly updated, so as to avoid any future legal repercussions.

To finalise the area eligibility of each member, it is necessary for the Society to agree upon each flat’s existing area. In case the Society has records of the old approved plans in which individual flat sizes are mentioned, the same can be adopted and finalized by the General Body. In case, the records are missing or are not clear, then the Redevelopment Committee will need to appoint a Surveyor to survey the Society Plot and also take measurements of individual flats of members. The surveyors shall measure each flat and submit a detailed plan for each flat. The plans should be cross checked with each member and thereafter accepted by the General Body.

Once the above process is done, the Tender documents can be prepared by the PMC. Generally in any Redevelopment proposal, there are 4 variables that are offered by the Developers that differ from offer to offer, viz. Additional Area, Hardship Compensation, Transit Compensation and a One – time Shifting Compensation. It is important that the Society members agree upon a reasonable amount as Hardship, Transit and Shifting compensations and ask for Developers offers with these three figures as constant. Thus all offers will be same as far as these three variables are concerned and the only difference in the offers shall be the additional area offered by Developers as a Percentage of the member’s existing area. The comparison then becomes very easy to understand.

The Committee has to get inputs from the PMC and finalise the list of Amenities that the Developer shall be asked to provide within the members’ flats as well as in the common areas. While demanding such amenities, there is a tendency amongst some members to go overboard and ask for unreasonable amenities to be included. Please appreciate that although it sounds as if developer is giving such amenities free of cost, in reality it comes out of the members’ pockets only. The more unreasonable the demand for amenities, the lesser the Developer’s offer will be for additional area to be given to members. It is therefore imperative that the Committee takes the advice of the PMC and draws a list of amenities that are reasonable and in line with what the Developers typically provide in that locality.

The other aspect to be kept in mind is whether the Society wants to float a public tender by advertising in leading news papers inviting for bids from unknown Developers, or by asking only known reputed Developers to fill the Tender documents. It is always better to have offers from known Developers who have carried out projects in similar location so that chances of failure are substantially reduced. In such cases, even the offers will be more realistic.

One word of caution while drafting the Tender is that the terms should be realistic and not lop-sided. It is important that the Developers are given a reasonably free hand to perform well while at the same time safeguarding the Societies interests. Thus a fine balance needs to be maintained at the time of drafting of Tender conditions.

A specific directive was issued by the Maharashtra Government under section 79(A) of the Maharashtra Cooperative Societies Act 1960, which gave out guidelines to be followed by Societies while appointing Developer for Redevelopment. It is imperative that the Redevelopment and the Managing Committee understands the requirements of this directive and ensures that the entire process of appointment of Developer that is mentioned therein is by and large followed by them.

These days, one common problem for Societies with respect to this directive is that with the Real Estate Regulatory Authority (RERA) rules now becoming applicable, most Developers refuse to provide a Bank Guarantee. That’s quite a reasonable stand since RERA rules mandate that the Developers open an escrow account in which 70% of the Sales Revenue generated from the project is to be deposited and that amount can only be used for issuing payments to complete that particular project. Although the Directive 79A mandates that Bank Guarantee upto 20% of the project cost is necessary, the directive was issued when RERA was not in existence and secondly the directive is more in the nature of guidelines and therefore if the General Body agrees to let go of the Bank Guarantee clause, it is not in contradiction with Directive 79A as long as it is recorded properly in the Development Agreement.

Click here to read the Directive 79(A)

This is by far the most crucial aspect of the Redevelopment process. The entire success or otherwise of the project is dependent on this one decision! It is therefore very important that a logical and scientific process is adopted in order to finalise the Developer. It would be advisable for the committee to rate each developer on the basis of criteria that they all agree upon and arrive at a point based scoring system which makes comparison very objective and removes individual biases out of the process, rather than just be guided by the brand name of a company. For example, one could rate each Developer on a score of 0 to 10 for each important aspect like: Integrity / Honesty, easy accessibility, financial strength, technical knowledge, experience in the industry, track record of completing projects in time, etc. to name a few. When such scoring system is introduced and each Developer rated on each of these parameters, the selection process becomes very transparent and straight forward.

It is advisable that at the stage of selection of the Developer, the Society takes all the technical inputs and general recommendations from their PMC, but the internal rating and negotiations process with the Developers should be directly handled by the Redevelopment Committee to ensure that no favoritism takes place.

It is worth mentioning here that as per the DCPR 2034 (i.e. the current Development Control Regulations), the TDR that can be loaded on any plot is based on the width of the road from which it derives access. Therefore, even within the same locality, different plots have different FSI potentials. Also, in some cases the original building may not have consumed the full FSI at the time when it was constructed. Hence it may be misleading to be guided by what offers other buildings in thee locality may have got. Thus it is better for the Society to be guided by the feasibility report of it’s specific plot than going by feedback as to what is being offered by other Developers to other Societies. Also, one must bear in mind that it is safer to sacrifice a few sq. feet of additional area, then be guided by greed and select the most lucrative offer from an unreliable Developer only to regret later.

Once the Developer has been selected, the committee must work hand in hand in a cooperative manner to ensure smooth working of the project. Before the Developer starts preparing the building plans, it is important to inform them if any members wish to purchase additional area over and above the free of cost area being given to each member. Once the areas of all members (including such additional purchase area) are frozen, The Developers will have to prepare preliminary plans through their Design Architects that will be based on the current D. C. Regulations incorporating all the commitments between the Developer and the Society as far as the members areas and amenities are concerned.

Once the plans are frozen, the committee must work with the Developer to allocate individual flats to the members and get it approved by the General Body. Again to ensure transparency in the process some basic rules must be drafted and followed that are agreeable to all before allotting flats to members. While this process is on, the Society must engage the services of a reputed lawyer who has expertise in real estate related matters to guide them throughout the entire process of Redevelopment. The Lawyer shall give his inputs to the Development Agreement drafted by the Developer’s Lawyer, to safe guard the interests of the Society. Once the Development Agreement draft is ready, the Developers should pay the necessary stamp duty and registration charges and execute the agreement. The DA needs to be registered with the Registrar’s office.

It is advisable that all the members of the Society (not just the Managing Committee members) sign the DA. This will ensure that when the individual Permanent Alternate Accommodation Agreement is executed between the Developer and the individual member, only a nominal Rs. 100/500 Stamp Duty becomes payable on the same, if that particular member is signatory to the Development Agreement. Thus if all members sign the Development Agreement, though the process may become cumbersome, but it will result in saving Lacs of rupees in further Stamp Duty.

The Society shall also have to appoint the Developer firms partners as their Constituted Attorneys and register a Power of Attorney in their favour to enable them to represent the Society in Municipal Corporation and to make various applications in their names.

Once the Development Agreement is signed, the Developers should submit the building plans as approved by the General body to Municipal Corporation of Greater Mumbai (MCGM) for getting the same approved. The process will involve getting NOCs from the Chief Fire NOC, the Civil Aviation NOC, etc. Once the proposal is in-principal approved by the Hon. Municipal Commissioner by granting his approval on the concessions required for the project, the Developers should go ahead and purchase the TDR and have the same loaded on the Society’s Plot. IT IS EXTREMELY CRUCIAL THAT THE SOCIETY INSIST THAT THE DEVELOPERS LOAD THE FULL TDR AS ALSO MAKE ALL PAYMENTS TO THE MCGM FOR VARIOUS PREMIUMS INCLUDING PURCHASING PREMIUM FSI, FUNGIBLE FSI, ETC BEFORE VACATING THEIR EXISTING FLATS. This will almost certainly ensure that the project will thereafter not get stuck for lack of funds for the simple reason that major fund inflow will already have been done while purchasing TDR and paying all MCGM premiums and thereafter the Developers will get support from financial institutions as well as cash inflow from sales revenues to complete the project. This should be the main condition of the Tender and should be insisted upon rather than asking from Bank Guarantee from the Developers. This condition will automatically ensure that only resourceful Developers who have access to ready funds will bid for the project.

Once the Developer gets the IOD for the full FSI (for the entire building as proposed up to the top), he should give a month’s notice (or as mentioned in the DA) in writing alongwith all the supporting documents and approved plan copy. The Society should get the documents checked by their lawyer and the plans properly checked by the PMC to confirm that all members’ flats position, floor and area are as per the understanding between them. Also all common amenities like Clubhouse, Entrance Lobby, Gardens, etc. as may have been finalized and recorded in the Development Agreement are correctly shown in the approved plans. In fact, the entire process of approval is now online on the MCGM portal and it would be prudent for the Redevelopment Committee to check the project’s online approval status and monitor it. Once all of this is checked, the members should move out of their flats and shift to temporary alternate accommodations for the entire duration of construction.

Upon their shifting, usually the Developers shall part with a) Shifting Compensation b) Brokerage Compensation c) part of Hardship Compensation & d) Part of the Transit Compensation, all of which shall be as per the terms of the agreement. Once the Society gives the Developers vacant possession of the Society plot, the Developers are free to demolish the existing building and start the construction of the new building.

Although the role of the Redevelopment Committee is not too much in this phase, it is nevertheless crucial to ensure the project is completed as conceived within the committed timeline. It is important that the Redevelopment Committee meets regularly (say once a month) with the Developer’s representative and the PMC to ensure that whatever decisions are required to be taken by the general body or the Committee are done without any wastage of time.

Finally, after a few years of efforts this stage is achieved. Once the Developer applies for Occupation Certificate (OC), the Committee must sit with the Developer’s team and chalk out the planning for the possession of the members’ flats to ensure that unnecessary time is not wasted once OC has been received. One important step will be to ask the PMC to take measurements of the as-built flats of the members and ensure that the area of the flats are as mentioned in the Agreement. A proper handing over strategy should be chalked out whereby once the OC is received and the notice period as mentioned in the Development Agreement is over, the Committee can take official possession of the building premises from the Developer smoothly.

All the as-built drawing copies should be taken from the Developer including Architectural working drawings, Structural drawings, electrical and plumbing drawings, etc. Full set of all approved plans as well as all the other approvals of MCGM and all other correspondence with various Government authorities should be insisted upon and to be kept in safe custody. It maybe a good idea to laminate the important drawings and documents.

The committee must ensure that all the services like Electricity meters, Gas Meters, etc. are transferred in name of individual members for which it will have to take the Developer’s NOC. The Developer should at this stage handover the application forms from all the new flat purchasers to the Managing Committee to ensure that they are accepted as new members of the Society as per the Bye Laws.

The Redevelopment Committee will need the help from the Developer to get the Assessment of individual flats done in the MCGM local ward office to ensure that proper areas are recorded against each flat since this will be the permanent record on the basis of which taxes will have to be paid to MCGM each year.

This pretty much completes the process of Redevelopment.