Verify the Developer's Identity and Track Record
Before anything else, conduct thorough due diligence on the developer. This goes beyond their glossy brochures. Look into their financial stability, past projects, and reputation. Check if they have a history of completing projects on time or if they are
entangled in litigation. A developer's past performance is a strong indicator of their future execution. Verify their company registration, the directors' credentials, and check for their registration on the Maharashtra Real Estate Regulatory Authority (MahaRERA) portal. An unregistered project is a major red flag. Remember, you are not just signing up for a construction project; you are entering a multi-year relationship with the developer.
Scrutinise the Development Agreement
The Development Agreement (DA) is the single most important legal document in the entire process. Do not sign it without having it vetted by an independent lawyer. This agreement must clearly define the rights and obligations of both the society and the developer. Key clauses to check include the exact carpet area of your new flat, the project completion timeline, detailed specifications of construction materials and amenities, and the agreed-upon corpus fund. Ensure it has strong penalty clauses for delays and a clear dispute resolution mechanism. Ambiguity in the DA is a recipe for future disputes.
Confirm All Financial Terms in Writing
Verbal promises hold no legal value. All financial commitments must be in the registered agreement. This includes the corpus fund (a one-time payment to the society for future maintenance), the monthly rent for temporary accommodation, and any other promised payments. The agreement for your Permanent Alternate Accommodation Agreement (PAAA) should be registered. Ensure the developer provides a bank guarantee, which typically amounts to 20% of the project's total cost, as a security against default. This financial safety net is crucial if the developer fails to complete the project.
Check the Status of Legal and Regulatory Approvals
A developer cannot legally begin construction without securing a host of approvals. This includes the Intimation of Disapproval (IOD) and the Commencement Certificate (CC) from the Municipal Corporation of Greater Mumbai (MCGM). The project must also be registered with MahaRERA, which makes project details like approved plans and completion timelines publicly accessible. Residents should verify these details on the MahaRERA website to ensure the developer's claims match the official record. Proceeding without these approvals can halt the project indefinitely.
Understand the Terms of Temporary Relocation
During construction, residents must move into temporary alternate accommodation, with the cost usually covered by the developer through transit rent. The agreement must clearly state the monthly rent amount, the payment schedule, and include a clause for rent escalation if the project is delayed beyond the stipulated timeline. Delays are common in Mumbai redevelopment, sometimes stretching for years, so this clause protects you from bearing the financial brunt of rising rental costs. Also clarify terms regarding brokerage and shifting charges.
Ensure the Society’s Title is Clear
The redevelopment process can only proceed smoothly if the housing society has a clear and marketable title to the land. A crucial document is the Conveyance Deed, which proves that the ownership of the land and building has been transferred from the original builder to the society. In many older societies, this may not have been done. Before inviting any developer, the society must ensure its ownership documents, like the Property Card and conveyance, are in order to avoid legal complications that can stall the project.
