Redevelopment Of Housing Societies

Redevelopment is the tearing down of the structure of an old housing society in order to build a new, modern one. This mostly comprises the cooperation between the members of the housing society, developers and the local authorities regarding compliance with urban planning norms and regulations.

Why Is Redevelopment Necessary?

Redevelopment is necessary because:

• Ageing Infrastructure: Many structures that were built decades ago undergo structural deterioration, becoming a danger to safety.

• Absence of Amenities: The older housing societies lack modern equipment like elevators, parking, security systems and green areas.

• Increasing Population & Space Constraints: Urban centres are facing a very high demand for housing; redevelopment optimizes land utilization.

• Increased Floor Space Index: Usually there is a higher FSI permitted by the government in redevelopment, allowing the developers to build taller buildings.

• Economic Benefits: Redevelopment adds value to the property, which is a source of financial security for the people living in it.

Legal Landscape For Redevelopment In India

Redevelopment is governed by different laws, municipal regulations, and guidelines provided by state governments. Following are some of the relevant laws dealing with the redevelopment of housing societies: 

Maharashtra Housing And Area Development Authority (MHADA) Act, 1976

The MHADA Act primarily governs the redevelopment of old and dilapidated buildings in Maharashtra. This Act has recently been amended to reduce consent for redevelopment from 70% to 51%, thereby quickening the process.

Development Control And Promotion Regulations (DCPR) 2034

This Regulation governs the FSI, zoning regulation, and land-use regulations for planned urban development. The developers are entitled to a special incentive FSI equivalent to 50% of the rehabilitation area for the redevelopment of cessed buildings in Mumbai.

Real Estate (Regulation and Development) Act (RERA), 2016

This Act requires project registration for commercial and residential development with the RERA authority. Registration is required when the land under development is more than 500 square metres or if the development provides for more than eight apartments. This Act further makes the developers liable for any structural defects to the structure for five years after handing over the property.  

Urban Planning Laws

State-specific Town and Country Planning Acts help in the preparation of development plans, zoning regulations, and control of land use. 

Process Of Redevelopment Of Housing Societies

The redevelopment of housing societies is a process that involves the following steps:

Step 1: Initial Decision & Feasibility Study 

• The first step is to study the condition of the existing property to see if redevelopment is indeed the ideal option.

• Members of the society discuss the need for redevelopment and conduct the basic feasibility study.

• A structural audit of the existing building is conducted to assess its safety and durability.

• This decision is taken at one of the Special General Body Meetings (SGMs) held by the housing society.

Step 2: Formation Of Redevelopment Committee

• A committee would engage with the actual process. This will create transparency.

• Legal and financial consultation can be taken.

Step 3: Developer Selection & Agreement

• A request for a proposal goes out, and interested developers offer their proposals.

• The members of the housing society vote for selecting the best proposal during the general body meetings.

• The mutually selected developer signs a development agreement. 

Step 4: Approval From Appropriate Authorities

• The next step is submitting the project for redevelopment for approvals from local municipal corporations, RERA, etc.

• The developer should get environmental and fire safety clearances.

Step 5: Temporary Relocation & Demolition

• Residents are then temporarily relocated to alternative accommodations whose rentals are borne by the developer.

• The old structure is demolished, and the new building is constructed.

Step 6: Construction & Handover 

• The new building is constructed in accordance with the approved plan.

• Flats are transferred to original members with additional compensation in terms of extra space, better amenities, and parking.

Benefits Of Redevelopment

Redevelopment has the following benefits: 

For Residents

• Bigger Homes: Redeveloped apartments are larger.

• Better Amenities: Modern security, lifts, gyms, gardens, parking, etc.

• Safety: New buildings adhere to the new standards of construction and fire safety.

• Property Value: Redeveloped flats will command a better resale and rent value. 

For Developers

• Profit Opportunities: Building more units by increasing FSI can fetch high profit.

• Government Support Programs: Some places offer tax exemptions and easy approvals for development work.

For The Government & Urban Development

• Maximum Land Utilization: Space utilization goes to the fullest productivity level with the involvement of such developed urban space.

• Upgrades in Infrastructure: Transportation, sewerage systems, and utilities are improved as areas get developed.

• Job Generation: More work means higher employment in the real estate and construction sectors.

Challenges In Redevelopment

Redevelopment is also marked by its challenges:

• Legal and Bureaucratic Obstacles: Long-standing approvals from local authorities as well as regulatory bodies often delay the progress of the project.

• Disputes among the Residents: Often, most residents may not agree on a redevelopment plan. Older residents may also object to shifting due to grievances of disturbance in the locality.

• Developer Malpractice and Delays: Some developers pull out of their agreements, leaving the victims with court cases and financial losses. In addition, delayed relocation to new homes worries the relocated families.

• Limited Budget: Not all communities can attract good developers, especially in communities where the price of land is low.

• Impacts on Tenants: Tenants during the redevelopment may be evicted or face a new tenancy agreement after redevelopment.

Precautions For Successful Housing Society Redevelopment 

Redevelopment provides various benefits, such as modern amenities, more space, and augmented property values. However,  this bears some risks involved. They need to take the following precautions at each stage to perfectly conduct the flawless and successful redevelopment of a housing society.

• Perform thorough legal checks prior to finalizing contracts.

• Ensure financial transparency while establishing an escrow account.

• Choose a dependable developer with a proven successful track record.

• Ensure that members of society have informed consent and keep channels of communication open.

• Arrange appropriate short-term accommodation with written agreements.

• Oversee the quality of construction while ensuring that all safety regulations are followed.

• Validate all necessary legal documents and occupancy permits before the inhabitants move into their new residence.

Conclusion

Redevelopment of housing societies is a crucial process for urban renewal, offering numerous benefits to residents, developers, and the government, from improved living standards and increased property values to optimized land use and infrastructure upgrades. By prioritizing due diligence, financial transparency, and community consensus, housing societies can unlock the transformative potential of redevelopment while minimizing risks and maximizing benefits for all stakeholders.

Disclaimer: The information in this article is for educational purposes only and should not be considered legal advice. Please consult a qualified attorney for specific legal concerns.