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5 Things You Must Know About Property Redevelopment

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5 Things You Must Know About Property Redevelopment

While property redevelopment has been quite popular in Mumbai, several other Indian cities like Delhi and Bangalore are also opting for it in a more planned manner

With the limited availability of land and an increase in the price of properties, the concept of redevelopment has become a popular solution to restore dilapidated buildings. Redevelopment is defined as the process of reconstructing the existing residential property by demolishing it to build a new structure in its place after proper approval by the municipal corporation of that city.

Homeowners, who are looking for redeveloping their current property, must be cautious and know about some important things before making the final decision.

RealtyNXT lists the most crucial points to know about redevelopment.

1. Essential Documents

The process of redevelopment can take place if at least 75 percent of flat owners in the society agree for it. After that, the building’s society must ensure that they have all the required documents to go forward with the redevelopment process. Some of these documents are the society registration certificate, an original building plan, a sale deed, an agreement, a title certificate, the society’s property card, and a Non-Agricultural (NA) order. The society can also hire a Project Management Consultant (PMC) for a better understanding of the entire process.

2. Choosing The Right Builder

There have been several cases when the builders have violated the law and delayed the construction of the buildings. The society must ensure that they select a genuine builder for the redevelopment of the property. The builder must be selected based on his reputation, merits, experience, the benefits he is willing to offer and his previous redevelopment projects. The final decision about the choice of the builder must be conducted in the presence of an authorised officer, a registrar and with at least 75 percent of the residents of the society. Dilip Shah, senior counsellor and an analyst for the redevelopment of housing societies, suggests that societies must go through the builder’s website and analyse his quality of construction of the other projects that he has built.

3. A Good Agreement

The society must hire an advocate to make the agreement. As the homeowners will let their asset to get demolished, the builder must abide by the law and fulfil the demands as stated in the agreement. The builder must ensure to pay a security deposit to the homeowners which should be equal to the cost of rebuilding the society. A bank guaranty of at least 20 percent of the total cost is also expected from the builder. An additional Transfer of Development Rights (TDR) must be purchased by the developer. TDR refers to the availability of a certain amount of extra built-up area in lieu of the area that has been surrendered by the landowner. The society must ensure that TDR has been purchased by the builder. This is because if the TDR rules change after vacating, the builder may not be able to give the extra flat area he had promised.

4. Providing Accommodation

The residents of the society must seek the cost of shifting from the builder. This cost should include the amount that the residents have to pay to shift to a new alternative place and back to the redeveloped society. The builder is also expected to provide alternate accommodation to the society members. Else, he must agree to pay the monthly rent for every member’s flat at least for the first year and post-dated cheques for the next year.

5. Vacating The Flat

The perfect time for the society members to vacate their flats would be only after the builder has received all the legal approvals from the higher authorities of the city. In the case of Mumbai, it would be the approval from Brihanmumbai Municipal Corporation (BMC). The flats must not be vacated until the agreement is registered and it is according to the demands of the society members. The society must carefully read the agreement and make sure that the developer does not violate it. Also, it must be noted that the rights of the occupants of the society do not change after the redevelopment is over.

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