• The suggestions include appointment and role of an Independent Authority for Redevelopment, what BMC can do to assist and a Framework for society’s Redevelopment Committee. 

eSamskriti earlier shared A Framework for Redevelopment of Housing Societies in Mumbai and a briefly Income-tax issues on Redevelopment

The Maharashtra government had done well to issue Guidelines in 2009, revised in 2019. Read Here

However, today there is a huge of amount of redevelopment (RD) activity in South/Central Mumbai and Western Suburbs. It is like a mad rush by residents of older buildings and developers. Since the frenzy is of recent origin the success or failure of RD is unknown.

What is known is that legal and commercial aspects are very complex and financial stakes very high. Buildings are being looked at from their RD potential. Younger members who are enamoured by amenities and larger flat area tend to dominate over very senior citizens (75 plus) who are in their twilight of their lives where stability is paramount.

Since the real estate market is currently on a high, developers can think of making fancy promises to existing members. But what happens tomorrow if there is a downturn? Will members who have vacated their homes return to new homes or shall there be an eternal wait like residents of Worli’s Shivaji Nagar in Mumbai. 

A lot has changed between 2019 and 2025. So, how does the State guide and protect the rights of existing members of older buildings?

CA Ramesh Prabhu, Redevelopment Expert and Chairman, Maharashtra Societies Welfare Association, has some suggestions-

“Redevelopment is going on across Maharashtra esp. in Mumbai Metropolitan Region, Pune, Nashik and Nagpur. The enabling provisions in DCPR 2034 for Mumbai and Unified DCPR 2020 for rest of Maharashtra are game changers.”

“Now, government should focus on regulating the sector by creating an Independent Authority who will regulate transaction between society, its members, developers, investors, contractors, Project Management Consultants and other service providers or Beneficiaries in redevelopment.  It should cover tenanted buildings, Property submitted under Maharashtra Apartment Ownership Act 1970, cess buildings etc.”

The authority could cover issues such as delay in starting redevelopment, violations of Developer Agreement conditions, non-payment of rent, not vacating premises, termination of the developer, appointment of first or change of developer, monitoring and supervising the project commencement to completion, addressing disputes etc.”

This piece tells about roles different parties to the RD can play.  Every such business opportunity brings power brokers into play. The public needs to be educated and protected by the state government.

What role can political parties like BJP and Shiv Sena (UBT) play?

Parties could have a Redevelopment Lawyer at their office in Dadar (for island city and eastern suburbs) and in Kandivali (for western suburbs). The lawyer could come say once a week, for five hours and answer questions on process/consumer protection. 

What role can the Deputy Registrar of Co-operative Societies play?

With an intent to help ordinary society members, a senior person could be deputed in key wards who, say twice a week, attends to Member Complaints where Managing Committee (MC) is not following Section 79A or and other provisions of the Maharashtra Co-operative Societies Act, 1960 (MCS Act). The intent is to prevent MC from taking decisions in personal interest.

What role can the Brihanmumbai Municipal Corporation (BMC) play?

BMC has a key role. It must prepare an FAQ for societies on all aspects concerning RD and update it regularly. The FAQ should include- 

1. List of BMC approved documents required before a society can consider RD? For e.g. Ownership of plot or Lease Deed, Property card number, Approved Plans.

2. Many buildings made during the 1950 to mid-1970’s might not have the above documents. So what is the remedy or penalty to be paid? 

3. It is also possible that societies when made, the Builder had used extra FSI (floor space index) and not paid for violation. The MC may or may be not be aware of such a violation. How will such penalty be calculated? 

4. In case the society members have made unauthorised alterations post approval of plans, how shall the same be treated and penalty levied?

In case Penalty is payable by the Society for any past violation, can it be paid directly to BMC, by individual flat owners? 

5. Since the RD trend will keep growing, BMC must inform the public of improvement in local area infrastructure, else bottlenecks will grow. It might then be like jumping from the frying pan into the fire.

6. BMC must make it mandatory that every RD proposal must state current and proposed green cover. How many trees would be planted in the RD project?

How can a RD Regulator (RDRG) help up to appointment of Developer stage?

1. Every society whose General Body has approved RD must register online with the RDRG. Post registration it shall receive a Unique Number.

2. In society matters, it is usually one member one vote. However, in case a society has members over 75 years of age, they shall have two votes. This is being suggested to ensure that younger members do not force very senior citizens out of their homes just because they are in a majority. Still if such a senior member is against RD due to say suffering from a sickness like cancer or paralysis, the affected member can approach the RDRG for relief.  

Given financial stakes involved, it is possible that power brokers bring upon undue pressure to sign for redevelopment. The Regulator must be empowered to protect such members

3. To assist in RD, a society has to use the professional services of a Professional Law Firm, a Law Firm, an Architect and Tax Advisors.

A Society can use the services of only those professionals who have registered with the RDRG. The RDRG website must publish the name of registered professionals. Suggested because many professionals make big claims about doing work for a society when were not appointed or asked to quit.

4. If suggestion 3 has to work, it is imperative for the society to inform the RDRG when the professional is appointed and services terminated.

5. Similarly, a society can sign up with any Developer whose names appear on the RDRG website. The society shall have to do duty as said in point 4 above.

6. The Law should be changed such that a Developer provides a Bank Guarantee towards rent payable for the entire project period plus one year. If the society has over 200 members period would be enhanced by another one year. The reason being that members should not have to fund rent from their personal resources in case project completion is delayed. This must be enforced by RDRG.

The bank guarantee amount would automatically reduce with every passing year when rent is paid to members.

7. During RD negotiations the Developer makes numerous promises to members in order to secure the deal. Sometimes, members discover promises are unfulfilled. Where does the member go? When the project is completed, the Project Management Consultant must in a letter to the Regulator and Members state the extent to which the promises made were fulfilled. 8. 

8. In case the RDRG finds any RDC or MC member guilty of asking for a bribe or being given personal favours, the regulator should be empowered to dismissing such member from all society related committees. Such a dismissed member can only appeal to the High Court for reinstatement. 

The society must register with the RDRG a letter signed by the Developer which lists the promises made to members. In case a Developer fails to fulfil these promises, society members can complain to RDRG who shall independently investigate the matter and if found guilty, a fine can be imposed on the Developer. This shall include blacklisting from accepting further RD projects.

How can a Redevelopment Committee (RDC) in a society be constituted?

The 2019 Circular or Section 79A do not mandate the appointment of a RDC to deal with the issues of redevelopment. It is assumed that the MC shall deal with all issues concerning RD.

However, in order to involve a larger number of members and due to complexity of RD some General Bodies appoint a RDC. In order that the RDC run smoothly, here is a suggested framework.  

RDC is compulsory when a society has more than 25 members or when a society chooses Cluster model of RD.

For every 25 members, there should be one RDC.

The RDC member should be a professional with an engineering, architect, legal, finance, income-tax or BMC compliance background.

If the society has say 200 members the RDC would haveeight members. If these members are spread over four buildings, there must be two members per building. 

Appointment of RDC members can be done only by the General Body. The MC is not allowed to nominate RDC members. 

The General Body must also approve Terms of Reference of RDC. Accountability must be clear and known.

The RDC must include MC members.

So, if there are say eight RDC members, there can be four MC members.

The MC has to decide who these four members would be.

Since the MC has to sign off on all documents, MC members have a right to review documents agreed to by RDC. However, since these documents were approved by the RDC, of which 4 MC members including the Secretary were a part, the MC shall suggest changes only when change is important.

It is important that the RDC uses the services of a professional services firm to ascertain the strength of the Devloper Balance-Sheet and do a Sensitivity Analysis of the impact, a fall in real-estate prices would have on the Developer’s ability to execute the project. Both these reports must be shared with members. 

How can the Finance Ministry in Delhi help with Income-Tax Clarifications?

The Income-tax department must release an FAQ on potential income-tax issues w.r.t redevelopment covering essentially individual and society’s tax liabilities. This will provide clarity and reduce member stress whilst potentially enhancing revenue. Read FAQ by CA Deepak Tikekar and CA Pradeep Kapasi

The above is only a starting point to the appointment of an Independent Redevelopment Regulator. Improvements and suggestions are welcome. 

If the State government fails to take appropriate steps and large number of members are left with no or incomplete houses, it could influence electoral results. Since many old buildings are occupied by Marathi Manoos failure to protect their rights would show promises by politicians as hollow. Mumbai's identity needs to be protected.  

A parting thought. The building of concrete multi-storey structures may be good for cement/steel sectors, state GDP and government revenue but is that good for society members too is important – how do we protect members.