When it comes to properties, everyone likes buildings to be in reasonably good shape. After all, who would enjoy crumbling homes? Buildings, however, start to show their age after 20 years of construction (assuming that the quality of construction is good). So what can one do to remedy the situation? Opt to redevelop the property.
Redevelopment – What you need to know
Almost all property owners find themselves considering redevelopment of their existing properties at one point or another. There are plenty of advantages to redevelopment. The occupants can enjoy updates in terms of amenities, quality of construction as well as contemporary design. More importantly, any wear in structure due to age is eliminated with demolition and rebuilding. Members are offered benefits in return. Also, the Society will not need to spend large amounts on major repairs on a frequent basis as may be the case with older structures.
Builders typically prefer redevelopment projects since they don’t need to invest large amounts in purchase of land. Instead, they simply enter into agreements with property owners to demolish and reconstruct a new building.
Developers usually offer cash or additional area or a combination of both in return. Common terms also include provision of temporary accommodation for residents, rental compensation or a fixed amount per month towards your rent.
There is also a specific incentive index against FSI which varies by city and needs to be checked on by the society.
Requirements for redevelopment
Redevelopment has a very different procedure when compared to a normal purchase of property. The documentation and procedure that are required in a redevelopment project usually comprise:
- Consent from society members
- Sale deed
- Title certificate
- Original building plan
- Copy of registration certificate of society
- Certified copies of property register card
- Latest bills pertaining to electricity, water, municipal tax, non-agricultural tax bill and so on
- Members’ name list with preferences in terms of flats and parking spots
Areas of concern
Society members need to be wary of instances where they might be compromised. Some such instances include
- Delay in completion of construction
- Non-delivery of agreed specifications and quality
- Non-compliance with compensation promised
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The ideal way to go about redevelopment is to take a meticulous approach. Beginning with research into what needs to be done, members of the Society can opt to hire a professional consultant to manage the project. The Society must discuss its requirements and expectations with the consultant for better clarity.
Paperwork must be organized and maintained by the consultant and tenders can be invited from builders. Finalizing a tender needs the presence of at least 75 per cent of the Society, the consultant as well as an authorized officer and registrar. As for the agreement, it would be best for the society to appoint a lawyer who can thoroughly examine the clauses and ensure that the Society is not in a vulnerable position.
Redeveloping a property can literally mean a new lease of life for occupants of the building. However, since it is tantamount to betting your existing property, it must be carried out with utmost care and no assumptions or undue risks.
This is an adaptation of a few articles from the Legal Eagle section of The Hindu Property Plus.
