PHASE WISE JOURNEY
WHAT'S NEW?
Regular Users
Login/ Sign in for free access to our Guideposts, Standards and Dos & Don’ts.
Help >> FAQ
| Sr. No. | Question | Answer |
|---|---|---|
| 1 | Is GST payable in case of Redevelopment? If yes, is it to be paid on the additional area received from the developer or on the total area? | As per the present scenario, for the existing members of the Society, GST is mostly applied on the Additional Area, though in some cases, it is found to be applied on the Total Area of the New Flats. However, this has been challenged in Bombay High Court and the proceedings are at an advanced stage |
| 2 | After 79 A how long appointment of builder / developer is valid? Can Developers delay Development Agreement for more than a year? Does it make appointment of Developer invalid. If yes when? | 79A merely gives guidelines for "Selection" (not Appointment) of a Developer, whereas conditions about the "timely performance" of Developer must be very clearly specified in the Tender Document itself. On the selection of a Developer, a "Letter of Intent" (LOI) is issued to it. This LOI should also have a condition regarding the time frame in which a Development Agreement (DA) must be executed. The Developer is "Appointed" only after a DA has been executed. DA is a crucial document for a RD Project and must be executed. |
| 3 | After 79A Process the Redevelopment Committee has started giving access to developer. Allowed them to put up Developer's board as well as Allowed them to setup an office in society premises. They even accepted developers DD and put in society's account. Nothing was conveyed to members in advance. They are planning to get DA done from members even though Society Conveyance and Property card is not ready. (Nothing has been finalised yet - Only additional area to be given is committed by developer) Please guide. | 79A Process is followed only for "Selection" of a Developer. But its "Appointment" is confirmed only when a DA is executed. A Developer may be allowed to put up his board only after DA is executed. But, even then, there is no need to allow it to put up its office in the Society's premises until the premises are vacated. DA can be executed only after Conveyance is secured in the name of the Society. |
| 4 | We have 7 societies on one plot of land with individual conveyance deeds but there is no demarcation of individual society plots. For redevelopment of individual society, whether consent letter/ No Objection Letter is required from other societies? | If you want to go for RD of your Society as an independent project, you will need to secure demarcation of your plot in relation to the other plots. It is also likely that there are internal roads and RG (recreational ground) subplots in your layouts which jointly belong to all 7 Societies. In such a case, if any of them is required to be relocated/ for RD, NOC will be required from all Societies in that layout. |
| 5 | Is there any timeline within which DA has to be signed? Are we within our rights to compel the Developer to get the plans cleared by the authotities before signing the DA? | Unless DA is executed, there is no concluded contract between the Society and Developer. Therefore, once the Commercial and Contractual terms and conditions are finalized, DA should be executed at the earliest. 79A Guidelines recommend that DA should be executed within 3 months of Selection of Developer. While this is possible, it is rarely seen to happen. Developer submits the plans to Statutory Authorities and secures approvals under a Power of Attorney (PoA) from the Society. Therefore, it cannot be expected it to do it unless DA is executed and PoA is issued to it. The common practice is to work simultaneously on DA and plans but execute the DA only after tentative floor plans are approved at the Society level |
| 6 | Can a Society move forward with the Redevelopment process without having BMC approved plan? | It is very important to have Approved Plans of your existing building, ideally the plans at the Full OC stage or else at the Full CC stage. There are some important provisions and commercial benefits which are linked with them. If such plans are not found in the Society's record, you can get them from BMC's records or water supply department. But, if they are not found anywhere, while putting up a proposal for approval, the Project Architect may use the data available in the original Assessment record (for Carpet Area) and Registrar's record (for no. of Flats) of the Society and make a representation to claim the commercial benefits. This is subject to the policy in force at that time. |
| 7 | My society has signed DA with developer in 2023 but developer is not executing PAAA what to do? Building is demolished and construction in progress at 1st floor. | DA is just a contract for the implementation of the Project as a whole and will come to an end when the Project is over, whereas PAAA is the only document which will establish your right as the owner of your New Flat in future. |
| 8 | Is it necessary to resolve all litigations before appointment of developer? Our society is at the stage of getting feasibility report. There are two litigations in Thane co-operative court. One, Society has filed an expulsion case against one member five years back. Second is, one member has filed case against another member for irregular construction in the flat making society party to it. | The litigations mentioned by you are concerning internal disputes within the Society. Your Redevelopment Process need not wait for their resolution, which may take time. While drafting the Tender Document, your Society should provide basic facts about these litigations as disclosures for the bidders' information. The litigations should again be discussed with the Shortlisted Bidders and a line of action should be jointly decided before selecting one from among them. Meanwhile, the proceedings in courts shall continue. |
| 9 | I am looking for a flow chart of redevelopment process steps. Such as SGM for Redevelopment, Appointment of PMC, Tender making and Floating, Opening of Tender in SGM, Shortlisting of Developers (Min 3), 79A process for developer selection etc. | For all the Steps right from inception of your Redevelopment Project upto its completion and handover, please visit our website: www.redevelopment.info It can be accessed from your mobile or laptop. |
| 10 | If 79A process is followed for a standalone project and then it is decided to go for Cluster Development Scheme (CDS), is it necessary to start 79A process again? | 79A Process lays down Guidelines to initiate a Redevelopment Project, conduct it in a systematic manner and select a Developer by majority and in a transparent manner. After a Developer is selected, if the Society and Developer jointly decide to switch over to another Regulation on mutually agreed terms and if such a decision is taken by the General Body of the Society in a transparent manner, the Selection Process need not be repeated. |
| 11 | As per market practice , how much Corpus, Rent and Additional Area can a builder offer for a plot area of approx 18,000 SqM in Vile Parle West with Cluster Redevelopment? | Each Redevelopment Project is unique. Therefore, how much commercial benefits one can expect from it depends on its Technical Feasibility and Financial Viability which are established through a Feasibility Study. Any wild guesses can be grossly misleading and can jeopardize the Project. Having said that, following are the key factors which can influence your commercial benefits: 1. FSI Potential - Depends on the Regulation (Scheme), Road Width, Setback, Height restrictions etc 2. Existing Consumption of FSI (whether any FSI remained unutilized) 3. Market Sale Rate (depends on area/ location) 4. Potential for Commercial Utilization, if any 5. Upfront Investment (loading of TDR, terms of payment of Corpus, Rent etc) 6. Additional Costs, if any, such as Premium for Conversion of User, settlement of Existing litigations etc _For deeper understanding, please watch Webinar No. 3 from our "Successful Redevelopment" Series. Wwblink: https://youtu.be/_MSBeHWaKmg |
| 12 | What is the structure of a Redevelopment Committee (RDC)? Does it have office bearers? What is the function of RDC before appointment of PMC? | In respect of Redevelopment, the Society is represented by its "Managing Committee" (MC) who should conduct the "Process" of Redevelopment in a transparent manner. Major decisions must be taken in a Special General Body Meeting (SGM) only. There is no need of a "Redevelopment Committee" (RDC) as such. In fact, there is no mention of RDC in the 79A guidelines. However, a Society may constitute a RDC to facilitate the process of Redevelopment and assist the MC on specific matters depending on the expertise of the individual members of RDC. However, the function of RDC is only Advisory in nature. An RDC may remain functional up to a certain stage of Redevelopment (eg up to selection of a Developer) or may continue till completion of the project depending on the internal decision of the Society. |
| 13 | What is the factor to convert MOFA Carpet Area to RERA Carpet Area? My MOFA area entitlement was... And as per the plans received from the builder, I am getting RERA area of... | MOFA and RERA are different ways of expressing the Carpet Area of a flat depending on their definitions. As a fundamental difference, MOFA Carpet area excludes the area under internal walls, whereas RERA Carpet area includes it. Therefore, RERA area will measure more than MOFA area for the same flat. However, there is NO fixed factor to convert MOFA area into RERA area. For two different flats having the same MOFA area, the RERA areas can be different depending on internal planning, especially the internal walls. In very general terms, RERA area may be more than MOFA area by 4% to 6%. It can be misleading to use a factor to estimate the RERA area of your flat from its MOFA area. The best way would be to calculate or verify RERA area directly from the plan as per the definition of RERA. |
| 14 | I am the Secretary of a Society at Santacruz West, Mumbai. Our Builder has verbally informed that IOD is expected within a month and we should prepare for vacating. What are the precautions to be taken before vacating? ... R. T., Secretary, CHS, Santacruz, Mumbai | When you get the IOD, first you need to check is whether it covers the "Minimum Development Potential" as specified in your Development Agreement (DA) and whether any important compliances are pending. The other major things which must to be completed before vacating are: Execution of PAAA and Agreed payments & PDCs to existing members and Society. These are the main precautions to be taken before vacating existing flats. After all flats are vacated, there are some more precautions to be taken before the plot itself is handed over to the Developer for construction. They are: Securing Performance Guarantee (Bank Guarantee/ Lien on Security Flats), Agreed payments at that Stage, Getting Baseline Project Schedule from the Developer etc. For more info, Pl visit www.redevelopment.info > Pre-Construction Phase. |
| 15 | Our Society building is only about 20 year old. But in our last SGM, it was decided to do its Structural Audit, which seems to be too early. What are the statutory provisions regarding when it is to be done? ... B. H., Member, CHS, Ghatkopar, Mumbai | For Mumbai, Structural Audit is governed by Section 353B of the MMC Act. Its provisions say that the First Structural Audit should be done when a building is 30 years old and further Structural Audits should be undertaken ever 10 years thereafter viz at 40, 50 years etc. However, if the structural condition of a building is bad, it may be undertaken even before 30 years or more frequently thereafter. These provisions apply to all buildings. However, in respect of buildings owned by CHS, the byelaws adopted by them mostly have another provision for Structural Audit. According to Byelaw No. 76, the First Structural Audit should be done when a building is 15 years old and further Structural Audits should be undertaken every 5 years thereafter until the building becomes 30 year old, after which it should be undertaken ever 3 years. This may be because CHS buildings are generally not maintained well. Your Society may have decided to undertake Structural Audit as per your byelaws. Since Structural Audit is concerned about the Stability of your building and Safety of its occupants, it may be prudent to undertake it even more frequently than what has been prescribed. For more info, Pl visit www.redevelopment.info >Structural Audit Tab on the Home Page |
| 16 | 1. If there are pending litigations within the Society, will developer get them resolved or the cases will continue as it is? 2. Will the Developer reduce the offer (additional area or corpus) in such a case? ... P. M., Member, CHS, Thane | An Existing litigation can affect a Redevelopment Project in two ways - cost and time for its resolution or settlement. And this will depend on the Nature and Current Status of such a litigation. Therefore, you should consult your PMC/ Lawyer and disclose information regarding its Nature and Current Status in the Tender Document itself. You should also clarify whether you would expect the selected Developer to resolve/ settle them at his cost or whether you would do it at the Society level. Because of the foregoing explanation, such existing litigations may result in lesser commercial offer and extension in the project duration, especially for the Pre-Construction Stage. It may also result in fewer bidders responding to your Tender. |
| 17 | What are "Door Jambs"? Are they to be included the "Existing Carpet Areas"? | "Door Jamb" is that narrow strip of carpet area which you cross when you go from one room to another through a door opening. For each door it equals an area of Width of that Door (say 3 feet) multiplied by the Thickness of Wall (say 6 inches) through which the door is made. Door Jambs may be calculated from an approved plan or from measurements of original "unaltered" flats. Door jamb areas of all such doors may be included in the "Existing Carpet Areas". They may vary between 1.5% to 2.5% of Existing Carpet Area of each flat. |
| 18 | Can Society remove PMC or Legal Advisor without the approval of its General Body? I.e. by taking signatures of members? ... S. C., Member, CHS, Goregaon, Mumbai | As mentioned in 79A, a PMC for Redevelopment is to be appointed in the Society's General Body Meeting (GBM) with majority consensus. Therefore, if the Society wants to terminate the contract with its appointed PMC, the decision to do so should also be taken in a GBM and by passing a resolution to that effect. You may, however, collect signatures from other members and write to the MC to convene such a GBM. The foregoing discussion should apply to the Legal Advisor also, being an external consultant. |
| 19 | Our Society has selected a Builder and we are in the process of finalizing the Development Agreement. I want to know if the Rent, Corpus, Brokerage and shifting charges are to be paid to each member when he vacates his flat or when all members have vacated their flats. ... N. L., RDC Member, CHS, Girgaum, Mumbai | In fact, your terms of payment will depend upon the Developer's Final Commercial Offer based on which he was selected. Having said that, the commonly followed terms may be as under: 1. On each Member vacating his flat: - Entire Brokerage & Shifting Charges - First Year's Rent (lump sum for 12 months or PDCs as agreed) 2. On all Members vacating their flats: - Rental PDCs for the balance period (monthly, quarterly, half-yearly, yearly etc as agreed) - Corpus (part amount as agreed) - Balance Corpus (PDCs as agreed) |
| 20 | Our building is G + 4 and about 38 years old. It is in a reasonably sound condition (not dilapidated) and may survive for another 10 years. Still some members in our Society are pushing for Redevelopment. As per the recent Structural Audit Report it falls in C2 Category. Can I object on this basis? ... V. K., Member, CHS, Pune | If a building falls in C1 Category, it is a fit case for Redevelopment and that process should be started immediately. However, if your building is in C2 Category, you may still go for Redevelopment for other reasons - such as to avoid high expenses for recurrent repair, to have better amenities (lift, car parks, swimming pool etc) or to get bigger flats, Corpus (commercial benefits) etc. You may object to Redevelopment, but the decision for Redevelopment is taken by majority as mentioned 79A guidelines. |
| 21 | Is appointment of PMC mandatory for Redevelopment through a Developer? Can a Society float a tender by publishing an advertisement in newspaper without appointing PMC? ... R. K., PMC, Navi Mumbai | Redevelopment is a very complex project which involves diverse aspects such as technical, commercial, legal and social. It runs for 5 or more years from its inception and is susceptible to various uncertainties/ risks which vary from changes in policies/ regulations, market conditions, a non-performing Developer, non-cooperating members etc. Such challenges are more frequent and acute especially in the formative period of the Project - till a Development Agreement is executed and Statutory Approvals are received. Considering the uniqueness and complexities of Redevelopment, it would be prudent to engage a Project Management Consultant (PMC) who can bring in his expertise and experience to guide the Society through the Process of Redevelopment. Strictly speaking it is not "mandatory" to appoint a PMC. And Society can float a Tender by itself. But, in that case, the Society will have to manage the Process of Redevelopment and deal with the Developer all by itself. |