Redevelopment

What is a Redevelopment?

Redevelopment is a process wherein the existing building is demolished completely and a new building is constructed there in line with norms as laid down by the local / statutory authority. It a huge kind of work, efforts requiring Society members unity and careful approach on behalf of the housing society. There are various parameters to be looked into when we talk of Redevelopment. It is possible to have additional carpet area, Corpus. Additional FSI is sold to outside buyers & from this money Developers Revenue & Profit is generated.

A building of 25 – 30 plus years of age, or it its in a dilapidated stage, cost of structural repair, and renovation will increase its lifespan by marginally, say for another 4 to 5 years. Redevelopment is a more advisable & feasible option to move forward. The appreciated (market value) of a new unit under redevelopment concept is always is higher compared to a unit in a repaired building. A redeveloped building offers new, clean look & feel for the existing members when they move into new premise allotted to them.

Their standard of living goes up. The members can enjoy modern amenities viz. swimming pool, a Hall, CCTV Surveillance, Security, Gym etc. Similarly, the Society members get new upgraded fire fighting systems, brand new elevators, adequate number of parking lots also.

Merits of Redevelopment

  • Better planned and designed flats with earthquake resistant structure can be achieved.
  • Corpus / Profit share received by each individual member can take care of an increase in the maintenance cost of their flat or could be used for other important need.
  • Additional area of 25 to 30% is expected as a compensation from the Developer. Any, additional space, as applicable, could be purchased from Developer at an comparatively reasonable pricing.
  • Most latest facilities / upgraded amenities / Equipment's like elevators, communication means, smoke detectors, fire fighting alarm system, concealed plumbing, fire resistance cabling for electricity, telephone, cable TV wiring etc. can be availed.
  • Stilt or under ground parking (single level, stacked, multi levelled or puzzled) will be available which will ease space on the ground.
  • Facilities viz. Clubhouse, Swimming Pool, Gymnasium, Community Hall etc. will be available.

Demerits of Redevelopment

  • The DA (Development Agreement) for preparation if not done properly under the guidance of an expert legal consultant might result in a great loss to the members who have given their consent for the Redevelopment.
  • During the Redevelopment process / project tenure, the members have to surrender their flats and stay outside disrupting their day to day routine.
  • New members occupying additional area would take longer to gel with the original members, resulting in disputes on various issues, due to the culture gap & difference in the mindset.
  • Additional vehicles will require additional parking space. New construction loaded with all kinds of modern amenities which will in turn increase the cost of maintenance to be paid to the Society.
  • In case the Occupation Certificate (OC) is delayed on not obtained, Municipal charges and Water charges are levied heavily.
  • There is increase in Property Taxes as per prevailing Ratable value assigned by MCGM.
  • It’s a fact that there is always a fear of half way stalled project resulting in Court case.

Various Types Of Redevelopment

  • Option I – Redevelopment, by engaging services of through a Developer / Builder. The most preferred & well-versed option.
  • Option II – Redevelopment, by engaging services of a DM (Development Manager) for initial funding to obtain statutory approvals and then by applying for Construction loan to get the construction work executed through a Civil Contractor. It’s a lesser known option.
  • Option II – Redevelopment, by adopting a Self Redevelopment Module, wherein the funding is raised by the Society Members OR through a financial institution.