REDEVELOPMENT OF HOUSING SOCIETIES IN BOMBAY - WHAT TO KNOW

The building I currently live in is undergoing important discussions on an upcoming re-development project proposed to be executed in the immediate future ( spanning 2-3 years ). While the discussions seem to be on a preliminary level, it seems major decisions have already been made by the Society's Managing Commitee. While normally, bids are invited from various builders after a structural audit is done by an experienced architect on whether the building actually requires a re-development or simply repairs will suffice; it however seems our housing society has already zeroed in on who the builders would be for the project even before the audit has been done. In the recently held meeting they were garlanding and shawling the builders as though they ( the latter ) were Gods themselves. This is a new territory for me, so, my curious mind immediately started seeking more information. What would be the risks or benefits ( if any ). I've owned my flat for amost 21 years, I better know the answers!

Redevelopment is when a seemingly old building ( above 40 years ) is demolished to make way for a new building with greater FSI ( Floor Space Index ). For example, the current building I live has four floors ( it is 30 years old ). After redevelopment, the new construct will have more floors added - about 10-12 floors. There'll be lifts, it currently does not; and, other upgrades The old flat owners will have about 35 percent increased floor space for free and the builders will be able to sell the additional units in the open market, and get their profit. My building is in prime location, so, if the redevelopment happens the builders will make guaranteed profits ( in multiple of crores ). But while all these seems hunky dory and too good to be true - it also comes with risks especially for the flat owners. They'll have to sign agreement and vacate their flats for couple of years. Although, the builders will give rent for the duration ( atleast they've said they would ), nothing is guaranteed. The society will sign development agreement where they hand over the land and building to the builders who will raze it down. And although, they say it'll take 2-3 years for the project to be completed, there has been numerous instances of abandoned projects and where flat owners got a raw deal in the end, or, may have got nothing at all. They were left completely at the mercy of these builders.

Once the society hands over the project to builders, the old society no longer exits. It dissolves Only a panel overlooking the re-developments are appointed who will recieve periodic salary and updates. A new society will be formed and registered after completion of the project when the 'promised' units are handed over to the old owners as well as new owners who buys the newer units joins the society.

So, a thorough reseach has to be done before handing over our homes to the builders. A background study of the builders is a must. Who exactly are these builders? What are their track records? How many projects have they completed and delivered with OC without any hindrance? What are their finances? What are the sources of their finances? Has my society committee done their due dIligence?

Our building has one major issue. Like 50% of Bombay buildings, it doesn't have an OC. Buildings without OC requires to get a deemed conveyance where title of the land is transfered to society's name. While couple of years ago, our society did collect money from everyone and had applied for DC, no one exactly knows of its progress or current status. So, if a builder takes over a building without OC, and he agrees to get DC done, the society must at no times agree to transfer the land name into the builder's. It's like calling for its own suicide. Is my society aware of these requirements; and also, risks? I hope they are not blindly doing things.

Also, to note, our building is currently 30 years old ( 1993-94 construct ), does it really need a redevelopment now or can be repaired and painted; and, given 10 more years life - as is the normal norm with re-developments being done of 40+ yrs old buildings. Are my society hurrying things? Because, to my knowledge, I feel my building doesnot have major structural issues at the present and one can easily do some outer repairs and get the building painted. It'll look as good as new. They've never really painted the building from outside in the last 30yrs - atleast, I never seen it the time I've lived in the building. So, whats the hurry. Are managing commitee too eyeing at some profits - because, the profit is in multiples of crores. And only by re-development they'll get it; not in the current situation. Are they in cahoots with the builders? I personally don't care if they do take some of the profits if ultimately things turn good for the flat owners. Also, when the society dissolves, they get to pocket the entire corpus/sinking fund they've collected over the years without being answerable to anyone which is also in several lakhs if not crores in itself. Things are quite hazy and unsure as of now.

Will update more on the project's progress! Keep watching this space...