Self Redevelopment by Housing Societies

Housing societies wanting to employ the option of self-redevelopment wherein the society undertakes to go for redevelopment on its own rather than appointing a developer has numerous advantages for the society and its members, however, there are risks associated with it.  Such risks can only be mitigated through an advisory panel for implementing this option.

Advantages:

  •  Additional space along with monetary gains as compared to traditional redevelopment model.
  • A substantial portion of the developer’s profit under the traditional redevelopment model will be retained with the society and its existing members.
  • Provision of Rent to members for the entire duration of the project paid at the commencement time.
  • Members desiring to purchase additional area over and above the free area at a discounted rate.
  • No restriction on the quantum of the additional area that members can purchase subject to only planning constraints if any.
  • The legal title of the land remains in the name of the society itself without any transfer of development rights to the developer.
  • The number of parking, the amenities like health club etc. to be provided for can be decided by the society based on its specific needs.
  • Plans are approved under society’s name only.
  • Society and its members can opt for the higher floor flats for themselves and balance can be kept for sale in the market.
  • The entire project will be under the control of the society and its members only.
  • Plans once approved will not be changed without the consent of the society and its members.
  • The project as per the approved plans only thereby facilitating faster procurement of Occupation Certificate from MCGM.
  • Authority in the hands of the society for plans designs and also setting development standards.

Challenges:

  • Generating the required funds to meet the project costs.
  • Lack of expertise and skills amongst the Managing Committee and its members to execute the redevelopment project. This also can act as a deterrent for a few existing members to give their individual consent for self-redevelopment.
  • Addressing the doubts amongst prospective purchasers of timely completion of the project if the society itself is executing.
  • Lack of comfort level amongst the various professional consultants, contractors and liasioning agencies involved in dealing with the Managing / Redevelopment Committee at each stage.
  • Handling of sales enquiries to the satisfaction of the prospective customers / real estate agents etc. and the ability of actual closure of sales to facilitate repayment of the loan taken for the project.
  • The possibility of disputes relating to the manner in which the project is being implemented amongst the Committee itself and/or amongst the members of the society.
  • Staying updated on the change in norms and regulations on the real-time basis.
  • Once the members have vacated the existing building there are time overruns that the society may be exposed to on account of lack of expertise and skills needed for smooth implementation will result in substantial financial costs overrun as the project will be incurring fixed overheads irrespective of the fact that the construction is progressing or not.

To mitigate the above pitfalls, Anandamide Self Redevelopment Advisors Pvt Ltd has been formed with the main objective of rendering the entire gamut of services for a management fee that will assist and act as hand-holding of societies wanting to go for Self Redevelopment option thereby facilitating smooth and timely implementation of the project.