Self Development of Society 

Buildings
About Self-Redevelopment
• Redevelopment executed by existing members using resources with the support of financing
agencies and professionals.
• Redevelopment with better accountability and transparency.
• Redevelopment without interference of any developer.

Majority of the residential buildings, in Mumbai, are literally above 50 years old. Some are
literally dilapidated and some are in dire need for large scale repairs. in both such
eventualities, very large sums of money is needed to redevelop such buildings. Further in the
Society’s Balance Sheet, there are hardly any funds accumulated over these 50 odd years, for
Major repairs. This forces the society residents to continue living in such dilapidated and
structurally weak buildings.

This is leading to calamities in which there is not just loss of infrastructure but also loss of
lives. Between 2001 and 2015, Mumbai reported more than 100 deaths in both 2005 and 2013
because of structure collapses. The death toll was more than 50 in six of the fifteen years and
was less than 50 in the rest of the 7 years. Who's to blame for Mumbai buildings collapsing like
pack of cards every year?
 Self Redevelopment- Better to be Safer than Sorry

Strangely housing society members heavily depend upon a Builder/Developer, who

may be less educated and brings borrowed funds on higher interest rates, But society
members do not trust themselves. Most of Cooperative housing societies members are
non cooperative among each other, and the benefit of the same is taken by the
developers/builders. In today's market, its difficult to trust outsiders and one must take
charge of the situation and go for self redevelopment. Its better to be in driving seat
and lead the change rather than depend upon a builder. 

With appropriate guidance, patience, trust and mutual understanding, the Society can
consider for “Self Re-Development” of their buildings, which in turn translates into
substantial savings and earnings for the Society Members, in terms of permanent
“Corpus Fund” in the Balance Sheet, of such Societies, which again in turn translate in
lowering down maintenance bills of the members.
 Benefits Of Self Redevelopment For Society

Why to take a chance with your hard earned property? Its better to redevelop on your
own, self redevelopment. Benefits Of Self Redevelopment For Society
• Maximum Profit.
• Complete Transparency.
• Development Rights Retained.
• Total Project Control.
• Extra area at project cost.
• Assured timeline for getting accomodation in newly built premises.
• Building Plans will not be changed, without ALL “individual” members consent
• Corpus Fund can be accumulated at more than 2 times vis-a-vis builders offers
• Building will be designed & developed by the members themselves and in their
presence, without any hindrances
• Members may use their discretion to develop their residential buildings into
residential cum commercial buildings, which has its own advantages, in terms of
money and facilities.
• With the advent of latest Directions by the Coop. Dept., the members may use
their discretion to install Mobile Towers, Advertisement Hoardings, Solar Systems,
Wind-Mills, Club House, STP, Swimming Pools and other facilities and amenities,
which translates into more in-house amenities.
• BMC “Occupancy Certificate” will not be a problem, since the members will
develop the buildings, ONLY as per approved plans.
• Building will be developed on time schedule, unlike the builders who usually delays
the project for his own vested interests.
• Free Sale Flats, can be purchased by the original members, on costing basis
• Free Sale Flats, can be sold and restricted to certain categories
• Issue of Free Parking spaces can be solved
• Common Spaces cannot be sold and under-hand dealings can be avoided.
• Merging (amalgamation) of Two flats is possible, at Building Planning stage.
• Buildings can be completed before schedule, thus saving Rent for members
 SOME DISADVANTAGES OF “SELF-REDEVELOPMENT”
PROCEES

Like all other difficulties in life, Self-Redevelopment also has some

lacunas:
• Needs Time, Inclination, Money & Energy (T.I.M.E.)
• Needs “24 x 7 x 365” Professional Back-up. However this is not a major
issue due to the availability of Professional Consultants, atleast in
Mumbai.
• Issue of Finance, for Construction Cost for Self-Redevelopment.
• Since Self-Redevelopment is not practiced widely, Society members are
highly apprehensive in terms of loss of self-confidence, trust and
mutual understanding.
Developers Redevelopment Vs Self Redevelopment
• Development rights remain with the society
• More profits means extra corpus to be shared in the society after completion of
the project.
• Transparency in Design & Planning for Timely completion of Project
• Societies do not have to be dependent on the developer’s timeline and finance
• Risk pertaining to Developer dependability is eliminated
• Professional guidance from the Team in Project Organisation & Project
Management
• Extra profit means less burden of Maintenance cost on existing members
• Existing members shall have more say in planning and shall be benefitted with
more areas in certain cases

Self-Redevelopment of Society buildings can be conducted easily & successfully,

with proper planning and strategy, after keeping confidence and by taking help of
experienced and relevant Professional Consultants of the field.

Redevelopment has become further necessary and inevitable, due to BMC

directions on Structural  Safety and repairs of 30+ year old buildings and
discretionary authority available with BMC, to vacate dilapidated buildings.
• Development rights are transferred to Developer
• Limited corpus to be distributed by developer to existing
members
• Planning and Design as per Developers view
• Possession is solely dependent on Developers performance
• Customization is limited and only as per developers
Preference
• Less transparency, that leads to delay in completion of
project and more hardships to members
• Profits of the project are retained by Developer
CORPUS FUND
• Typically in Redevelopment thru Builders, the Society members are paid some money in
terms of “displacement fund alias Corpus Fund”
• Sometimes this Corpus Fund is given to the Society, which the Society may secure it in its
Balance Sheet, for appropriate investment, for purposes of earning Interest.
• Sometimes this Corpus Fund is given to individual members.
• In terms of SELF-Redevelopment, the criteria of Corpus Fund can be generated from Sale of
the Free-Saleable Flats,  which would be constructed over and above the number of flats
for its original members /residents.
• With prior & appropriate mutual understanding and trust, the original members may
mutually decide to appropriate such Corpus Fund, generated thru Self-Redevelopment
process, for mutual benefit of the Society.

RENT CHARGES
• Typically in Redevelopment process thru Builders, the Society members are paid “Rent”
money for alternate accommodation till the Redeveloped flats are duly taken over by the
original members.
• In terms of SELF-Redevelopment, the criteria of “Rent” money for alternate
accommodation till the Redeveloped flats are duly taken over, is a major issue, which needs
to be decided with appropriate mutual understanding and trust.
• However this Rent Charges, can be adjusted subsequently from the accumulated Corpus
Funds, generated from Free-Sale Flats
EXTRA AREA
• Members may mutually decide to avail the percentage of extra area and the area of Free-
Sale Flats,  since this can be turned into Society’s advantage, in terms of Corpus Funds
generated from Free-Sale Flats.
SHIFTING /LOGISTIC CHARGES
• Typically in Redevelopment thru Builders, the Society members are paid “Shifting
/Transportation” money to the alternate accommodation till the Redeveloped flats are duly
taken over by the original members.
• In terms of SELF-Redevelopment, the criteria of “Shifting / Transportation” money for
alternate accommodation till the Redeveloped flats are duly taken over, is a major issue,
which needs to be decided with appropriate mutual understanding and trust.
• However this Shifting /Transportation  Charges, can be adjusted subsequently from the
accumulated Corpus Funds, from Free-Sale Flats.

STAMP DUTY & REGISTRATION FEES

• Typically in Redevelopment process thru Builders, the builders pay the Stamp Duty and
Registration Fees, for the new Flat Agreement of the original members, subject to various
parameters.
• In terms of SELF-Redevelopment, the criteria of “Stamp Duty and Registration Fees” money
for the new Flat Agreement of the original members, is a major issue, which needs to be
decided with appropriate mutual understanding and trust.
• However this Stamp Duty and Registration Fees, can be adjusted subsequently from the
accumulated Corpus Funds, from Free-Sale Flats.
OCCUPANCY CERTIFICATE (OC)
• Typically in Redevelopment thru Builders, the builder takes adequate liberties
to conduct several lapses (illegalities), consequent to which the BMC does not
grant “Occupation Certificate (OC) “, which in turn means double the rate of
water-charges for all residents of the building.
• These lapses (illegalities), can be easily avoided and stopped, when the building
is developed on “Self Re-Development” basis.
• An “Occupation Certificate (OC) ” also means higher Sale-Value of the Flats and
easy Bank-Loans for buildings granted with Occupancy Certificate.

COSTING OF REDEVELOPING BUILDINGS

• The typical cost of construction is approximately between 1200/- to 2200/- per
CARPET square feet (depending on location and luxuries being provided). This
“includes” charges for Development permission from BMC, all Professional
Consultants fees and other incidentals.
• The “Free-Saleable Area” is sold by the builder,  approx. between 10,000/- to 25,000
per CARPET square feet (depending on location and luxuries being provided).
• The tentative earning the Builder earns out of each Carpet square feet is
approximately 7000/- to 20,000/- per CARPET square feet (depending on location
and luxuries being provided).
• This also means that to construct ONE Flat of approximately 1000 square feet
(carpet area), the all-inclusive construction cost is approximately Twenty (20 Lakh
rupees) in Mumbai Suburban area, which includes all costing’s.  This is possible if
the Conveyance of the plot of Land, is in the name of the Society.
• The above translates into Construction Cost of approx. Twenty (20 Crore rupees) in
Mumbai Suburban area, for constructing 100 flats of approx. 1000 square feet
each (carpet area).
• Presuming that out of 100 Flats, 50 flats are to be given to original members, there
remains 50 Flats for “Free Sale” (Free-Saleable Area), which can easily be sold for
Two Crore each, thus translating to 100 Crores in terms of Sale-Price.
• Presuming further that cost of construction of 20 Crores is reduced from the 100
Crores received from “Free Sale” by the Society, there still remains approx. 80
Crores of Gross Profit.
• The above in turn translates into huge Corpus Fund to the Society, when in terms
of Self-Redevelopment of their own buildings.
• The above also means that if the Redevelopment is conducted by Builders, the
Society would not earn /save the huge potential of Corpus Fund and translating
the interest received on such Corpus Fund, into reducing their own Society
maintenance charges.
GOVERNMENT POLICY
• As a Public spirited legislature, AND in the larger interest of the residents of
old /dilapidated buildings, the Maharashtra State Govt., would do well to
consider to grant “Conveyance” of the Society plot in the name of the Society,
by legal default, via a special ordinance, atleast to those Residential Societies
which are over Forty years old.
• This may be specially considered in view of the vast amount of Stamp Duty
and Registration fees that will be accumulated by the Govt., due to registration
of the new redeveloped flats.

CONCLUSION

IF THERE IS A WILL, THERE IS A SURE WAY:  MEANS YOUR WAY.