Redevelopment Of Cooperative Housing Society

January 14, 2024

In recent years, both the Societies and the Builders have shown a great deal of interest in the topic of redeveloping the properties of existing Co-operative Housing Societies. Residents of older buildings are increasingly realising that by selling their property to a builder or developer for redevelopment, they have the chance to extract tremendous value from it as real estate prices have reached a new high.

Redevelopment is the process of tearing down an old society building and rebuilding it with the help of a qualified builder who can create and give new flats to society members free of charge with some additional benefits and make money by utilising the potential of the remaining plot by building additional flats and shops with M.C.G.M. approval.

In Co-operative Housing Societies, redevelopment has gained popularity because it is a practical, cost-effective, and long-term solution when older structures become unprofitable or obsolete. For the builder, it is a cost-effective way to build residential or commercial premises by utilising the untapped potential, such as the Floor Space Index-Transferable Development Rights with gradual capital investment, in times of high land prices and in a sizable urban area.

A Redevelopment Agreement starts with the idea for redeveloping the existing structure and ends with the Builder giving the Society the agreed-upon constructed area in the new building together with the corpus money or other financial compensation. Builders, for their part, are searching for buildings with unutilized development rights so that they can erect a new structure a few stories higher and resell the extra apartments for a healthy profit.

Builders and developers that want to buy land and develop it pay a hefty stamp duty fee when the land is transferred. Yet, the stamp tax is significantly lowered when it comes to the redevelopment of historic structures, which is quite advantageous for developers. Also, tenants receive a number of advantages, such as hassle-free execution, additional carpeting that increases the value of the apartment, and, in most cases, substitute housing or rent reimbursement during the construction of the building.

But, there are a lot of elements and questions that come up while the redevelopment process is still in progress, and they need to be carefully taken care of if redevelopment is chosen. Generally speaking, these considerations include the rapid implementation of governmental directives, delay in apartment possession during Housing Society reconstruction, Flats delivered on time, builders’ Bumps, Bash, and Bouncers, Busting of Housing Societies’ redevelopment initiatives, corrupt managing committee members, Faults, Redevelopment Facts and Foundations, Development Agreement drafting, Management Committee members’ involvement in redevelopment, Letter of Consent to be provided by a Housing Society Member, redevelopment corruption, the lack of sand and redevelopment, the collection of overdue fees from members, choosing a reputable builder, Unpermitted buildings built by Builders and many more.

A recent order by one of the deputy registrars of cooperative societies has highlighted the high-handed approach of the managing committees of cooperative housing societies and the hostility faced by the members in case of any opposition

The order pertaining to the at Versova was given on January 30 by the K-West deputy registrar, disqualifying and banning office bearers of the society from contesting elections for five years. In an ex-parte order, they were found to have violated provisions of the Maharashtra Cooperative Societies Act, 1960, by overcharging members through the collection of excessive transfer fees

One of the most common grievances against the managing committees is forcibly levying an annual ‘donation’ from flat owners who want to rent out their apartments. This charge is demanded additionally apart from the statutory non-occupancy charge. “Unless we make an online transfer or issue a cheque for this donation, the society refuses to issue a no objection certificate and does not allow the tenant to enter the society premises with their belongings,” Kurla resident Hemant Samant said.

Another flat owner shared that when they refuse to pay excess citing government resolutions and previous court orders against such payments, the society office bearers bring forth all sorts of frivolous complaints to get the tenant ousted.

“Issue is that the deputy registrar’s office is a quasi-judicial authority and the rule book is not followed in dictum. Different motives come into play, because of which people avoid lodging grievances with them, and as a result, the society office bearers have a free run,” said a lawyer familiar with the practices at such forums.

Analyzing the trend, Mukhtar Khan from the Democratic Youth Federation of India in Mira Road, said, “These office bearers do not have leadership roles or exposure elsewhere during their daily routine. Hence, a housing society becomes the only area where they get an opportunity to display their power and end up misusing the responsibility.”

Posted and reproduced in Public Interest by

Adv. Sulaiman Bhimani Legal Consultant

Expert in RERA & Consumer Matters, Co-operative Scty Matters,

Deem Conveyance, Family Matters, and Property Disputes.

Human and Civil Rights Campaigner

President Citizens Justice Forum https://citizensjusticeforum.in