5 guidelines for society redevelopment
As building new housing societies is crucial for a city, redevelopment of old residential buildings is also extremely crucial. Every building has an inbuilt shelf-life, after which it becomes unsafe, unattractive to the market and difficult to maintain. Now the problem is that the stakeholders of these societies often lack the information they need to make an informed call on which developer to enlist, and what guidelines they should follow before making a commitment.
Here is a brief reference guide which might help the residential building societies before making their final choice:
1) Handover Timelines- The most crucial component: A developer undertaking the redevelopment of a residential building can legally start the construction process only after he obtains the Commencement Certificate (CC). However, there are a host of other permissions and approvals to be obtained prior to that, together referred to as Intimation of Disapproval (IOD) approvals. Only after the IOD is obtained, the owners should vacate the premises for facilitating the construction.
2) Reimbursement Parameters: The housing society members of a project that is to be redeveloped are entitled to monthly rental payments from the developer undertaking the project. The guidelines should be clearly laid between the developer and the home owner as they have to pay for the rentals for the alternative accommodation.
3) Rental Escalation clause: It is important for the rental escalation cost to be included in the agreement between a developer and the housing society members as typically the rentals tend to increase by 10%, and it the re-development takes more than a year, then the owners have to shell out more rentals.
4) Increased Maintenance Costs Post Redevelopment: The maintenance costs for a project are bound to rise after it has been redeveloped, proportionate to the additional amenities such as recreational facilities, garden, swimming pool, gymnasium, covered parking that the developer has provided. This should be discussed with the home owners before staring such redevelopment projects.
5) Strong Delay Clause in The Agreement: There should be strong penalties for the developer if there is a delay in handing back the society to the owners and the terms and conditions should be clearly charted out.
Source- The Economic Times
CC, commencement certificate, Intimation of Disapproval, IOD, monthly rental payments, property for rent, rentals for the alternative accommodation, rentals tend to increase by 10%
