Category Archives: Redevelopment Agreement

Redevelopment Agreement with Developer

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v           Development Agreement with Developer

         The managing committee of the society, on passing of the resolution of appointment of developers at the Special General Meeting shall execute the development Agreement within one month of date of the said resolution, with the selected developer on the basis of terms and conditions approved by the members in the Special General Meeting under the consultation and guidance of the Architect/Project Management consultant. The Development Agreement shall contain other terms as under in addition to the terms and conditions recommended by the Architect, Project Management consultant(PMC) and the approved Special General Meeting.

  • Redevelopment of the building shall be completed within two years and not later. In particular circumstances it may take longer but shall not exceed 3 years.
  • The Developer shall provide a Bank Guarantor of 20% of the total cost of the redevelopment Project.
  • The Developer shall make provision for temporary alternate accommodation in the same area for the members who will be vacating the premises or shall make provision for monthly rental plus deposit to be paid to all the members of the society if they so agree or shall make provision for temporary alternative accommodation in the Transit Camp.
  • Development agreement shall be registered under the Registration Act, 1908.
  • New members, on completion of the project shall be admitted in the Special General Meeting. As members of the society.
  • Agreement must specify the carpet area to be given.
  • Rights to the redeveloped building of the society given to the builder are not transferable.
  • Flat owners shall vacate the premises only after obtaining all legal documents and permission of the competent Authority for redevelopment of building.
  • In case of one who is in possession of flat/premises and who is owner of the same, his right of ownership shall not be disturbed.
  • If there arises any dispute in the redevelopment of building agreement executed by the developer, Architect and society, it shall be resolved under the provisions of Section 91 of Maharashtra Co-operative Societies Act, 1960 and such provision shall be made in the development agreement.

 

v           Allotment of flats in new building

Allotment of the flats shall be given in the new building in the same manner in which the original flats were i.e. the floor; the location shall be allotted after the receipt of occupation certificate. If it is necessary to flats by a lot system, it shall be allotted accordingly but only after completion of building which is ready for occupation and members are ready and willing to occupy their premises. Allotment shall be done in the presence of an authorized officer of the Register. The developer shall make arrangement for video recording of the same.

v           Sanction plan of new building

         Sanction plans shall be obtained from the Municipal Corporation or Competent Authority who has the right to sanction the plans and shall be put before the special General Meeting. If any member wants to have any certified document, he shall make an application and shall also pay the requisite amount for a copy of the document to the secretary of the society; the Committee shall be responsible for providing required information to the members.

v           New members, Funds Etc.

«           New Members

         Additional members who have purchased new units in the redeveloped building/s should be made new members in the existing society. The Registrar concerned is to be informed (as soon as the development agreement is signed) of likely new members as soon as all the formalities are completed. The co-operative department should be given the full membership list with particulars. 

             New Share Certificates should be issued to the incoming members. The additional area and revised flat area should be accurately incorporated in the existing records of the society.

«           Funds of the Society

         The existing sinking fund belongs to the old members as Sinking Fund Certificates have been issued to them. Other Funds can be mutually agreed upon and distributed or equivalent contribution as one-time payment can be obtained from new members so that equality is maintained.

 

Beware ! Before entering into redevelopment agreement – Checklist

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Watch out before entering into redevelopment agreement
 

A redevelopment agreement,is an agreement for the restoration of an old building, between the residents and the developer. But it’s not as simple as it sounds; the housing society needs to exercise necessary caution to ensure that the residents’ interest is safeguarded.

“Even seemingly simple things such as getting the redevelopment agreement registered with the sub-registrar or then, paying proper stamp duty are very important in such a deal,” says Navdeep Co-operative Housing Society secretary, Girish Pradhan.

In most cases, the developer negotiates the deal of restoring an old building with the managing committee of the society. “In which case, the onus is on the managing committee to ensure that the interests of the residents are protected and they need to take all the precautions,” offers Pradhan.

“It’s advisable to discuss the agreement in detail at the general body meeting so as to arrive at a consensus, about the terms and conditions, in order to avoid later hassles,” he maintains. As with any property dealing, when it comes to a redevelopment contract, it’s of utmost importance to ensure that the developer has a sound reputation. “If possible, the members of the managing committee must visit the site of some of his previous projects, so that they get a first-hand information about the developer,” says the CHS secretary.

Considering that the property of so many residents is at stake, it makes sense to seek the help of professionals in getting a clear picture about the dealing that the society is entering into. “Sound advice from professionals such as lawyers, architects, engineers, before signing on the dotted line is sure to help the society make a responsible decision,” offers High Court advocate, Prem Sood, as he goes on to add that it is reasonable to hire the services of a technical supervisor who can keep a check on the work done by the developer.

In order to ensure the smooth implementation of such a contract, the respective obligations of the developer and the CHS members and the consequences of the breach, if any, need to be put down in writing clearly in the agreement. “For instance, the time of completion of the project and the consequences of non-completion in the stipulated time must be specified in the contract so that the developer doesn’t drag on the work,” says Sood.

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